Whether you’re looking to buy your own place, retire comfortably, or take a trip of a lifetime – setting long-term financial goals can help you succeed.
But when budgets are stretched and bills need paying, putting money aside for the future is easier said than done – and is often the last thing on our minds.
Our long-term ambitions are often ignored as we manage our day-to-day finances.
However, having something to work towards can help you stay focused, become more mindful of your spending, and enable you to reach your goals.
Here we look at:
What are long-term financial goals?
The benefits of having long-term financial goals
How to set and achieve long-term financial goals
What are long-term financial goals?
Long-term financial goals are those ‘big-picture’ costs that will take 5 or more years to achieve. For example, one day you may want to:
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Put down a deposit on a new home
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Take a trip of a lifetime
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Fund your child’s education
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Take a career break
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Become debt-free
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Retire early
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Start your own business
These goals typically involve more money than short-term goals (like building an emergency fund or saving for a holiday). But with the right tools and knowledge, they can be achieved – and be life-changing for yourself and others.
The benefits of having long-term financial goals
Setting a long-term financial goal could:
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Help you become more mindful about how you spend your money
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Help you stay focused
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Provide a sense of direction and purpose
How to set and achieve long-term financial goals
It’s never too early to set up a long-term plan – the earlier you set them up, the more manageable and achievable they can be.
1. Visualise your goal
Whatever your financial goal is, make sure you’re passionate about it. It needs to be something that motivates and inspires you.
For example, if you'resaving for a house deposit, imagine what it might be like to own your own home. Where would you live? How would you decorate it?
Perhaps you want to pay off your student loan or get out of debt. Imagine what it might feel like to take that weight off your shoulders.
If you’re hoping to retire early, visualise yourself living a more flexible lifestyle and doing something you’ve always wanted to do. Our retirement checklistprovides a list of mini-goals based on your age to help you get to where you want to be.
2. Make your goal specific and measurable
What do you want to achieve? How much do you need? When do you need it by?
When creating a goal, it helps to narrow it down and provide as much detail as possible so you can track your progress and celebrate the small wins.
Our savings goal calculator can give you an idea of a realistic timeframe to work towards.
The biggest long-term financial goal for most people is saving enough money to retire.Our retirement calculator helps you work out your projected retirement income and whether you’re on target to achieve the retirement lifestyle you’d like.
3. Build the amount into your budget
A budget is a plan for what’s coming in and what’s going out. You’re telling your money where to go, instead of wondering where it went – helping you prioritise spending. Use our budget planning tool to help.
If you have the HSBC UK Mobile Banking app, you’ll find money management tools to help you budget, grow your money, and achieve your financial goals. For example, our Balance After Bills feature shows you how much you could have left for the month ahead, once scheduled bills (standing orders and Direct Debits) are taken into account.
If you feel you're spending too much, look at what you can change. These everyday spending hacks can help you save money – providing extra funds to put towards your future.
There will be days when you go over budget – but that’s fine. Having a plan of action can help you deal with setbacks and bring you closer to your long-term goals.
4. Consider investing for the long-term
Investing gives you the potential to make more money than you would from a savings account.
Investing should be seen as a long-term commitment, meaning you should be prepared to invest for at least 5 years – although you can always access your money if you need to. This gives your investments a chance to grow and ride out any short-term fluctuations in the market.
The key thing is to make sure you have some money saved up before you start investing. We recommend having an emergency fund to cover 3 to 6 months’ worth of living expenses to avoid you having to sell your investments too early.
If you've got a long-term goal in mind, setting up an investment goal in the latest version of the app is a smart way you could get there. You set your long-term goal and we’ll work out how much you'd likely need to invest each month to reach it.
Remember – no investments are without risk, and you could get back less than you put in. Eligibility criteria and fees apply.
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