Achieving short-term financial goals has a significant impact on your life. These goals can help you build better habits and feel more secure, giving you the freedom to spend your time and money on what matters most.
The following 4 short-term financial goals 4 Short-Term Financial Goals You Should Have are great places to start. They are specific, measurable, attainable and relevant.
Paying off debts
Paying off unsecured debt is one of the best ways to improve your personal finances, especially high-interest credit card debt, which can quickly add up and lead to financial problems if you let it. Setting a goal to get rid of credit card debt within the next few years and sticking with it is an excellent way to increase your financial security.
Buying a home
While many people view purchasing a house as a long-term financial goal, it is also an achievable and worthwhile short-term goal to work toward. By focusing on saving towards your down payment each month, you can slowly but surely build up enough cash to purchase your first home.
Building an emergency fund
Having a savings account dedicated to unexpected expenses is a critical element of any healthy financial plan. An emergency fund can help you avoid costly alternatives like credit cards or payday loans when an urgent need arises. Saving 3-6 months worth of living expenses in a risk-free savings account can help protect you from financial hardship if the unexpected strikes.
Saving for a vacation
Taking an expensive trip can be an exciting short-term financial goal to work towards. Setting a savings goal to save enough cash for your dream getaway can motivate you to cut back on spending in other areas so that you can reach your savings target. You can even take steps to boost your income in order to reach this financial goal, such as starting a side hustle or working overtime.
Whether you are saving for retirement or just want to make sure you have enough saved to live comfortably in retirement, this is an important goal that will take some time to achieve. To determine how much you will need to retire, subtract your annual living expenses from your total income, including Social Security, retirement plans and pensions. Then, calculate how much you will need to invest in order to fund your retirement.
To get started with this short-term financial goal, you can use an online retirement calculator, such as the calculator from SmartAsset. Additionally, you can set up a monthly budget and look for areas where you can cut spending in order to save more money, such as cutting back on eating out or reducing your cable subscriptions. Lastly, you can invest in low-cost stocks by opting-in to your employer-sponsored 401(k) or using a robo-advisor. Choosing a tool that is easy to use and fits your needs is an essential step in making this short-term financial goal a reality.