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Short-term goals typically include building an emergency fund, paying down debt or buying a new car.
Longer-term goals can range from contributing to a childs college fund to saving for retirement.
If youre building an emergency fund, for example, thats a short-term goal.
Longer-term goals, such as saving for retirement, may have a multi-decade time span.
Stocks, for example, are a common investment used for long-term goals.
The remaining $1,000, or 20%, should go toward your savings and investments.
In many cases, you might have to prioritizeone savings goalat the expense of another.
If thats a concern for you, heres a suggested path to follow.
First, build an emergency fund of at least $1,000.
Next, prioritize your high-interest debt, such as any credit card balances you may have.
Saving for retirement is usually the next priority.
Remember that the earlier you begin saving for retirement, the easier it becomes.
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