Long-term goals are dreams that are in alignment with your values and that fulfill your heart’s desire. Long-term goals often require you to work toward them by fulfilling a series of short-term goals over a long period of time. The long-term goals are really your dreams the circumstances you want to create that will bring you inner happiness but they require a belief that you’ll get there eventually. They also require an ability to sustain belief and expend energy.

To create these kinds of goals, you need to look deeper than the task at hand. If your heart’s desire is to build a foundation of security for yourself and your children, that’s a laudable and valid lifetime goal, but you will need to break it down into a series of achievable goals.

Buy a Home in Three Years

Buying a home is both a major commitment and a multi-step goal that requires extensive planning and careful execution. First, to make it a concrete goal, you might want to shop around to determine your ideal, affordable neighborhood.

Assume you see a house that fits the bill and costs $170,000. You will need to add 12 percent to the price to account for price increases in real estate between now and when you buy. Your down payment will need to be at least $9,500 (5 percent of $190,000), and your payments will be $1,452 per month with a 30-year fixed-rate mortgage charging 9 percent interest. (You can look up what monthly payments would be for your loan using online mortgage payment calculators.)

If you’re a first-time buyer, an FHA loan will usually allow you to borrow an amount that, together with property taxes (assume 1 percent of the home’s value) and payments on your other debts, consumes up to 41 percent of your gross (pretax) income.

In this scenario, you would need an income of at least $51,000 per year to get the mortgage on this home, assuming that you have another $100 per month in interest payments on other debts.

To build your $9,500 nest egg, you will need to save $243 per month and grow it at a rate of 6 percent per year. Also, since you want to secure your down payment, you may choose to minimize risk on your savings by investing conservatively choosing high-quality bonds, rather than volatile stocks, for example.

Save $30,000 Over the Next Ten Years

To reach this goal, you would need to deposit $227 per month into a checking account paying 2 percent interest over the next 10 years. On the other hand, if you invest the funds for a return of 7 percent, you can lower your monthly nut to $175. Depending upon your level of comfort, you could also opt for a money market fund that would fall somewhere in the middle. The point is that you need to create the goal, determine how much you need to save to reach it, and then investigate the best way to maximize returns on investment. The table on page 35 shows how much you would need to save if you earned 7 percent on your investments.

Open My Own Business in Seven Years

Many of us hold this dream, and it’s a valid, achievable one. In terms of creating financial goals, ask yourself these questions: