Which option describes a medium-term goal?
buying a vacation home
saving 6 months of expenses
saving for a down payment on a house
inheriting a lot of money
Saving for a down payment on a house
A medium-term goal is typically something that you aim to achieve within a few years, usually around 3 to 5 years. Out of the options you provided, the option that describes a medium-term goal is "saving for a down payment on a house."
To determine the medium-term goal, it is important to understand the time frame and the nature of the goal itself. Buying a vacation home can be a short-term or long-term goal, depending on various factors such as your financial situation, the cost of the property, and the timeline you have for achieving it. Saving 6 months of expenses is usually considered a short-term goal, as it typically involves setting aside money for emergencies or unexpected situations in the near future. On the other hand, inheriting a lot of money is not considered a goal, as it is a passive event that does not require any specific action or planning on your part.
Saving for a down payment on a house is a clear example of a medium-term goal because it usually involves setting a specific target amount for the down payment, creating a savings plan over a few years, and working towards the goal with incremental savings contributions over time. This goal has a definite timeline and requires consistent effort to achieve.