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Achieving your long-term financial goals while paying for life’s big and small expenses might sometimes feel like a challenge. But it isn’t impossible. For example, sticking to a budget may help you build up your savings. And because there are different ways to borrow money, knowing your borrowing options may help you plan effectively for your long-term dreams.

Maybe you’re thinking, “How does more debt mean more savings?” We get the apparent contradiction, so think of it this way:

Some large purchases may be too big to fit into your everyday budget. For example, if your kitchen appliances need to be replaced, you might not want to run up a big balance on your higher-interest credit card. There may be a lower-interest tool that allows you to access cash quickly to pay for those larger necessities or for emergency expenses. This is when a personal loan might be a good option.

Taking out a personal loan may also make it easier to save for long-term financial goals. Instead of saving for one goal at a time, you might pay off an existing higher rate loan while also saving for things like retirement. Or, if you are waiting to buy a house until you save enough for a down payment, you risk tying up your money for this one goal while ignoring other plans.

What are short-term financial goals?

Short-term financial goals are typically related to everyday living or immediate needs. These might include home repairs, a vacation, or regular expenses like rent, mortgage, cell phone, or streaming services. Each of these expenses might be part of a well-planned budget.

Examples of a concrete plan might be putting $50 into your savings each month, paying cash for purchases under $20, or shaving $75 off your monthly household expenses by sticking to a budget.

What are long-term financial goals?

Long-term financial goals typically include those things that you do not pay for immediately but know you’ll have to pay for within a set period of time. This could include major goals, like covering a child’s college tuition, paying off your mortgage, or retiring with a certain amount of savings.

Short-term and long-term financial goals examples

Short-term goals and needsLong-term goals
Rent or insurancePaying off a mortgage by age 65
Credit card paymentsStarting a business
Emergency fundSaving for a child’s college tuition
Minor home repairsRetiring at 67
Monthly expensesPaying off a student loan

How might you use shorter-term borrowing to achieve long-term financial goals?

Borrowing to save money may seem contradictory. But unexpected events do happen. A sudden, large expense may have the potential to undo your savings progress.

What happens if you get a surprise car repair bill? You might dip into your savings, but that may upset your long-term savings goals. Or, if you don’t have savings, you might rack up credit card debt, which could hinder your short-term debt management goals. And if you don’t get your car fixed and need to drive to work, it may be harder to save. Fixing your car might be an immediate concern, but it also affects your long-term plan.

In this case, a personal loan might help you cover the unexpected expense without depleting your savings, adding to your credit card balance, or making planning feel impossible. With a personal loan, you get a fixed rate with one set regular monthly payment you can budget for. That could help you keep your short- and long-term financial plans on track.

Should you borrow now or wait and save?

Taking out a loan may not be an obvious choice as you strive to reach your long-term savings goals. But there are solid reasons to consider it. For example, if you wait until you save enough for every large purchase, you might not only delay getting some basic things; you may also miss out on fun and enjoyment. And when you dip into your savings for an unexpected expense or a special trip, you might slow your progress toward reaching your longer-term financial goals.

Instead, shorter-term borrowing with a tool like a personal loan may help you afford major expenses while keeping your personal finances on track. And a personal loan is unsecured, so you do not need to put up collateral (like your car or home) to receive the loan.

With a Discover personal loan, for example, you can borrow between $2,500 and $40,000. We offer flexible repayment terms which allows you to choose how long you’d like to repay your loan—from 36 up to 84 months.* You’ll know exactly how much you’ll pay each month, and for how many months.

You can also use a personal loan for a variety of reasons. Some people might borrow money to help pay for major events in their lives, such as a honeymoon or dream vacation. Others might use personal loans for medical expenses or home improvements.

Achieve your long-term goals with a personal loan

Saving and borrowing the right way might help pave the way for achieving your long-term financial goals. Life’s necessities, pleasures, and unexpected events may sometimes make it harder to save, but there are ways to help keep your long-term savings goals on track.

Think a personal loan may be right for you? Start by figuring out how much you need to borrow and what kind of repayment plan you can afford. Our personal loan calculator can help you do the math.

You’ll enter the amount you need, your credit score, and the length of time you might need to pay the loan off. After you get an estimated monthly payment, you can adjust the loan repayment term to find a payment that fits your budget. There is no commitment and no impact to your credit score.Estimate Monthly Payments

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*For example, if you get approved for a $18,000 loan at 12.99% APR for a term of 72 months, you’ll pay just $361 per month.