Setting short-term goals is equally important as deciding on long-term ones when it comes to achieving financial success. Short-term financial goals give you something to work towards in the immediate future, and they can help keep you motivated to manage your finances. They also allow you to track your progress and see how far you’ve come.
If you’re planning to set some short-term financial goals but you have no idea where to start, here are a few tips:
Tips When Setting Short-Term Financial Goals
1. Decide what you want to accomplish.
The first step to setting any goal, whether financial or otherwise, is figuring out what you want to achieve.
Identify and list down what you want your money to do for you in the next year. Do you want to put money aside for a down payment on a house? Do you wish to get out of your title loan sooner? Do you want to start saving for retirement? Whatever your aim is, make it clear and measurable so that you can see whether you’re on track or not.
Tip: If you’re having problems deciding on a precise goal, try the SMART goal-setting process. This is an acronym that means Specific, Measurable, Achievable, Relevant, and Time-bound. Using this method will help you create goals that are more likely to be achievable.
2. Set a timeframe for your goal.
When it comes to setting a short-term financial goal, it’s important to set a timeframe for yourself. It’ll help you stay on track and focused on your goal.
For example, let’s say your long-term financial goal is to save $100,000 for retirement. A short-term goal could be to save $500 per month for the next two years. This goal is specific, measurable, and achievable.
Another example of a short-term financial goal could be to pay off your credit card debt within the next year. To do this, you’ll need to come up with a plan to make extra payments on your debt each month.
It’s important to note that your short-term financial goals should be aligned with your long-term ones. This means that if your goal is to save money for retirement, your short-term goals should focus on saving money each month. If you have debt, on the other hand, your short-term goal should be to pay off as much debt as possible each month.
3. Create a budget.
Creating a budget will give you a clear picture of your income and expenses, and it will help you identify areas where you can cut back on spending. If you don’t know how to make a budget, try browsing the internet for budgeting tips or look for a budgeting app that can help you get started.
Once you’ve created a budget, use it to inform your short-term financial goals. For instance, if you want to save $500 per month for the next two years, you’ll need to make sure that your monthly expenses are less than your income. This may mean cutting back on some of your spending so that you can have more money to put towards savings.
No matter what your goal is, a budget can help you achieve it.
4. Automate your savings.
While it may seem like a no-brainer, automating your savings is one of the best things you can do for your short-term financial goals. When you automatically transfer your savings into a separate account, you’re less likely to spend them. This is a big help in reaching your financial goal faster.
You can automate your savings in a variety of ways. You can have a set amount deducted from your paycheck and deposited into your savings account each month. Or, you can direct deposit funds from your checking account to your savings account.
Whichever method you choose, make sure it’s something you’re comfortable with and that won’t put too much strain on your finances.
5. Let a financial advisor help you.
One of the best ways to set short-term financial goals is to ask for help from a financial advisor. A financial advisor can help you assess your current financial situation and develop a plan that will help you reach your short-term and long-term financial goals.
If you don’t have a financial advisor, you can find one by searching online or asking for recommendations from friends or family. Once you’ve found one, schedule an appointment to meet with him or her and discuss your financial goals.
Final Thoughts
Short-term financial goals are a great way to stay on track with your finances and make progress toward your long-term goals. By doing the tips above, you can be on your way to setting short-term financial goals that are SMART. And with a little discipline and hard work, you’ll be on your way to reaching your financial goals in no time.
