You can expect the most from saving for distant goals if you save regularly and start saving as soon as possible. Before you start saving, it is crucial that you set goals, expectations, and time horizons for saving.
Short-term goals:
- Creation of a contingency reserve, which is a key foundation of financial security. The contingency reserve is funds intended for unexpected expenses (repair or purchase of, for example, a washing machine, car repair, costs of a doctor or dentist, loss of a job, lower income due to illness or injury, etc.). The funds allocated to these expenditures must be very liquid and low-risk, which means that we can get them at any time – in a few days and without major changes in value;
- Saving for holidays.
Mid-term goals:
- Purchase of a car;
- Visit to an exotic country;
- Renovation of a house, apartment.
Long-term goals:
- Pension savings;
- Saving for the purchase of real estate;
- Saving for children (their studies, hobbies, etc.).
Saving in mutual funds is intended to achieve long-term financial goals.
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