What qualifies as a short-term financial goal?

What qualifies as a short-term financial goal?

• A. Saving for a retirement fund
• B. Buying a house within five years
• C. Saving for a vacation within one year
• D. Investing in stocks for long-term growth

Answer: (C)

A short-term financial goal is typically one that an individual aims to achieve within one year or less. Saving for a vacation within a year clearly fits this definition, as it involves setting aside funds for immediate enjoyment and travel plans that are upcoming rather than distant. In contrast, saving for a retirement fund is a long-term goal, as retirement planning usually requires several decades of saving and investing. Buying a house within five years also classifies as a medium-term goal since it exceeds the one-year mark but is still relatively short compared to long-term objectives. Investing in stocks for long-term growth is inherently aimed at significant future returns and is aligned with long-term financial planning. Therefore, the goal of saving for a vacation within one year aligns perfectly with being a short-term financial goal.

A short-term financial goal is typically one that an individual aims to achieve within one year or less. Saving for a vacation within a year clearly fits this definition, as it involves setting aside funds for immediate enjoyment and travel plans that are upcoming rather than distant.

In contrast, saving for a retirement fund is a long-term goal, as retirement planning usually requires several decades of saving and investing. Buying a house within five years also classifies as a medium-term goal since it exceeds the one-year mark but is still relatively short compared to long-term objectives. Investing in stocks for long-term growth is inherently aimed at significant future returns and is aligned with long-term financial planning. Therefore, the goal of saving for a vacation within one year aligns perfectly with being a short-term financial goal.