Top of main content

How to set long-term financial goals

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:

  • put down a deposit on a new home
  • take a trip of a lifetime
  • fund your child’s education
  • take a career break
  • become debt-free
  • retire early
  • 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:

  • help you become more mindful about how you spend your money
  • help you stay focused
  • 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 in life, 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 it’s saving for a house deposit, visualise what it might be like to own your own home. Where would you live? How would you decorate it? 

Perhaps you’re wanting 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 be doing something you’ve always wanted to do. Our retirement checklist shows you some mini goals you may want to consider, depending on your age, to 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 retireOur 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

Once you have money to set aside, a savings account is generally seen as a safe way to save. However, interest rates can go up and down. When they’re low, the interest you earn on your savings might be less than the rate of inflation. This means the money you save buys you less over time. 

If you can leave your money untouched for at least 5 years, investing is another option – especially for long-term goals. 

Investments – such as funds, shares, bonds and other assets – could have greater potential to increase in value over time than money in a savings account. However, no investments are without risk, and you could get back less than you put in. 

Market fluctuations are normal – having an emergency fund to fall back on, before starting a longer-term plan, can help reduce the need to dip into your investments.

Investment goals

Discover a smart way to invest and track your long-term goals in the latest version of the app. Eligibility criteria and fees apply.