allocating some of your pennies each month to medium term goals has many benefits in helping you stay focused on growing your pennies. Staying Focused on Medium-term Goals Extra Emergency Fund Before you begin paying off debt it is very wise to build up a small emergency fund to stop you having to resort to more debt in the event of a financial problem. But if you're saving for medium term goals. those savings can act as an extra fund to help bolster your emergency pot of pennies , giving you more security (until you spend those medium-term savings of course). For me my house deposit savings are acting as an emergency fund because I do not plan to buy a house for another few years. I'm still focused on the fund though:  I found that it was easy to focus on saving because I knew that every penny saved has a double purpose : the potential to help me in an emergence, and as the first steps towards my medium term goal of owning a house. Medium-Term  Becomes TODAY Quicker Than You Might Think Sometimes 'medium-term goals' quickly become today's needs: your car might break down beyond repair or an amazing opportunity might come up unexpectedly. I hate debt as much as the next personal finance blogger but by making a start on your medium term goals today rather than waiting to pay off all debt you will have flexibility : for example you could replace your car take