Which of the following is an example of a short-term financial goal?

• A. Buying a car within a year
• B. Saving for retirement
• C. Paying off a mortgage
• D. Establishing an emergency fund for the next five years

Answer: (A)

A short-term financial goal is typically defined as a financial objective that can be achieved within a relatively short time frame, often within a year or less. Choosing to buy a car within a year clearly exemplifies this concept, as it implies a specific target that the individual aims to reach quickly, requiring focused effort and financial planning.

In contrast, saving for retirement generally spans decades and is considered a long-term goal, as it involves accumulating resources for use later in life. Paying off a mortgage also falls under the long-term category, as it usually takes many years to fully repay. Establishing an emergency fund for the next five years, while important, indicates a timeline that exceeds the short-term definition, as it aims for a few years of savings rather than a swift, immediate result.