Where do you start when it comes to saving money? Many people recognize the need to put money aside, but they have many ideas on what to save for – how do you know what should be a priority? Setting savings goals is a must, no matter how large or small they are. They create an endpoint, one that you can work towards.

Consider your financial priorities as a first step. Knowing what’s essential to you and your well-being is important, and creating goals based on those expectations is vital. Here’s some insight to get you started.

Short-Term Savings Goals

What short-term savings goals do you have? Short-term goals are those you hope to complete in 3 to 5 years. For some people, this may be enough time to buy a car. For others, the focus may be creating a down payment on a home. Short-term goals require great savings discipline, and your savings should involve a limited amount of risk.

For example, a savings account is a good starting point; the money there could help you establish an emergency fund. Your further goals may expand outward in terms of the number of years. To achieve these strategies, you could invest in the stock market in less risky investments, or you could invest in a certificate of deposit as well.

Examples of great short-term savings goals:

• Create an emergency fund with at least $1,000. Then, work to build that to 3 to 6 months of your salary or your monthly expenses.
• Save for a vacation that’s special to you. You can put money aside for a trip that will help you build memories.
• Put money aside for bigger purchases. This could include new appliances for your home, a new laptop, or the latest mobile phone. What big-ticket items do you know you’ll need in the coming few years?
• Home renovations may be on the list, depending on their size and scale.

Intermediate Savings Goals

Intermediate savings goals extend even further in time, and it will take longer to reach these goals and require consistent work. You may attain these mid-term goals in six to 10 years. These could be bigger goals, like opening a business or buying another home. You can also save for the next 10 years for something particular for yourself, like an RV or a boat. Remember, it is up to you to determine what is most valuable and worthy of saving for each goal.

Intermediate savings goals have more tolerance for risk. If you put money in the stock market, for example, and your investment takes an adverse turn, if you don’t plan to use these funds for quite some time, there’s still ample time to recover from that and rebuild your wealth. Bonds are another option for intermediate goals. They allow you to have less risk for at least some of your savings, and you could put the rest into more risky stocks or mutual funds that interest you.

Some examples of intermediate savings goals may include:

• A down payment on a home could be your priority. You don’t want to wait too long to buy a home.
• Larger home renovations may take some time and could be a mid-length goal.
• College for yourself or the kids may be your priority now.
• A new or new-to-you car could be an excellent investment opportunity.

Long-Term Savings Goals

Long-term savings goals will take you 10 years or longer to reach. These are the bigger-picture savings goals, things you want or need later in life. The most common long-term goal is retirement; for others, it could be the ability to start a job or invest in a vacation property. Define what makes you happen and establish that as your goal.

When it comes to long-term goals, you certainly have more time to put money aside, and that means there’s more time to help you recover should your stocks or other investments do poorly for some time. That is why many people invest in slightly higher-risk strategies for this type of investing. However, if you plan to return in 12 years, you don’t want to put all your money into high-risk investments and leave it there.

Long-term goals to consider include:

• Retirement plans that offer tax advantages should be a must to start now.
• Starting a new business may be a decision you want to make.
• Buying investment property to help you fund your retirement goals and needs.
• Early retirement could also be something you save for so you don’t have to keep working.

Saving Strategies by Goal Type

Consider some savings strategies and how they may apply when it comes to any of these goals.

Short-term savings strategies may include the following lower-risk options:

• High-yield savings accounts
• Short-term government bonds
• Money market accounts
• Certificate of deposits

Mid-length savings strategies may include:

• Lower-risk stocks
• Lower-risk mutual funds
• Brokerage accounts
• 529 college plans

Long-term savings strategies may include:

• Employer-sponsored retirement plans
• IRAs
• Trusts
• Stocks with more risk

Where will you get started? Pick one area in each of these three levels and create a plan to start working towards your future.