How do short-term and long-term financial goals differ?

Short-term and long-term financial goals differ primarily in their timeframes. Short-term goals are typically defined as objectives that individuals aim to achieve within a year. These goals often focus on immediate financial needs, such as building an emergency fund, saving for a vacation, or paying off small debts. In contrast, long-term goals look beyond one year and often encompass larger financial objectives that may take several years or even decades to accomplish. Examples include saving for retirement, purchasing a home, or funding a child's education. The distinction in timeframes helps individuals prioritize and plan their financial strategies effectively, recognizing what can be realistically achieved in the short versus the long term.