Ringing in the New Year always sparks reflection on a new beginning and enthusiastic goals for the year ahead. Whether it be personal growth, must do experiences, or starting a new way of eating, we plan by jotting it down on paper, making a visual board, or telling someone our desires to be held accountable.

banner your financial health michelle sarna

Planning for our future should have the same process.  If we think of the financial situations and desires we have now, far into the future, and those in between, we can categorize them into buckets:  Short-term; medium-term; and long-term.  As time goes by, we will add to our lists and make changes for the earmarked funds as needed.  

Let’s start with short-term bucket goals for the year:  emergency fund; pay off certain debt; buy a household item such as a refrigerator or new sofa; small home improvement, etc. These goals are set to be met within a year.  

Next, is the medium-term bucket:  save for a down payment for a home; start a business; pay for college or a wedding; take a dream vacation; buy vacation home; invest in a project or business; these are just some of the middle timeframe goals—3 to 6 years into the future.  

Finally, our long-term bucket, which consists of saving for retirement; travel; college funding for kids or grandkids; help your kids with a down payment for a home; or increase the emergency fund in anticipation of large medical bills or in-home care.  

Our short-term goals should be very liquid. Funds should be accessible without fear of the value decreasing.  A separate checking or savings account is recommended.  The funds for the medium-term goals should earn some interest; however, if the goal is close to 3 years away, you want to be very conservative with those funds.  A CD or high interest savings account will help maintain the value.  The long-term goals should be invested according to the estimated date of withdrawal.  For example, if you are saving for retirement in 20 years, you should be invested in a growth portfolio.

Don’t hesitate to dream big; fill your bucket list items with your desires and potential needs and start an active plan to fund those buckets!

Michele Sarna is a financial advisor at Beacon Pointe and can be reached at (760) 932.0930.

Opinions expressed herein are subject to change without notice. BPA & BPWA have exercised all reasonable professional care in preparing this information. The information has been obtained from sources we believe to be reliable; however, BPA & BPWA have not independently verified, or attested to, the accuracy or authenticity of the information. BPA & BPWA shall not be liable to customers or anyone else for the inaccuracy or non-authenticity of the information or for any errors of omission in content regardless of the cause of such inaccuracy, non-authenticity, error, or omission, except to the extent arising from the sole gross negligence of BPA or BPWA. In no event shall BPA or BPWA be liable for consequential damages.

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