Short-Term vs. Long-Term Financial Planning: What's the Difference?

Short-term financial planning refers to the process of managing and allocating financial resources to meet immediate and near-term goals. It typically covers a period of one year or less and includes budgeting, cash flow management, and debt management.

On the other hand, long-term financial planning covers a longer period, usually five years or more, and involves setting financial goals and developing strategies to achieve them. It includes retirement planning, investment planning, and estate planning.

The main difference between short-term and long-term financial planning is the time horizon. Short-term planning focuses on meeting immediate needs and goals, while long-term planning focuses on achieving financial security and stability over a longer period.