Elevate Your Finances With Short-Term Goals

Short-term financial goals may seem self-explanatory, but sometimes the path to achieving them is not so clear-cut. Let’s take a look at short-term financial goals, how to make sure they’re achievable, and how to save for them.

What Are Short-Term Financial Goals?

Short-term goals describe immediate plans beyond just covering your necessities. The timelines for your goals will vary, depending on the funds you’re putting toward them and how you prioritize them (more on that later), but you’ll generally spend money on short-term financial goals over a few months or years. Some examples of short-term goals include building your emergency fund, paying off your debt balances, travel, a wedding, or minor home improvements. 

Strategies to Save for Upcoming Events

No matter what you’re saving toward, you need tried-and-true strategies to save money and achieve your goals. 

1. Determine where you’ll set aside the funds.

First, you need a place to store your savings until you need it. A savings account is a great place to keep money for your short-term financial goals because it’s easily accessible when needed, and there isn’t a penalty for withdrawing funds. 

2. Prioritize your short-term financial goals.

You’re likely balancing a combination of short- and long-term financial goals. To make the most of your money and achieve your goals, first determine your budget. Then, work your goals around your typical expenses. After determining your budget and how much you can set aside, decide how to allocate your funds toward your different goals, needs, and wants.

3. Track your spending.

An important part of determining what you can set aside for your short-term financial goals is seeing how much you’re actually spending each month. You can do this by tracking your spending through your mobile banking app or a money management app. A money management app will enable you to see all of your expenses in one dashboard so you can understand how much you’re spending on credit cards, takeout coffee, and streaming services. 

4. Set achievable goals.

Next, considering your financial goals through a SMART lens can help you be successful. The SMART acronym provides a set of actionable steps that help you identify and achieve your goals. 

Each short-term financial goal should be:

• Specific: Make your goal as exact as possible with the definitive amount you need to save. This is an indicator of when you can move to the next step.
• Measurable: This helps you know when you’ve met your goal — and why being specific with the previous step is important.
• Achievable: Do you have the resources you need to achieve your goal?
• Relevant/Realistic: Is your goal possible to achieve, and does it have meaning for you?
• Time-bound: Make sure your goal has a specific timeline attached to it, and decide when you want to achieve the goal.

Short-Term Plans for Paying Off Debt

Debts can get in the way of achieving financial goals. Let’s take a look at some effective strategies you can implement to pay off your short-term debts so you can focus on your goals.

Rework your budget.

It’s a good time to take another look at your budget and determine where you can cut down on some of your spending. For example, visit the library instead of the bookstore for new books, pack your lunch instead of buying lunch out at work, and make coffee instead of purchasing it at the coffee shop. Trust us — 300 takeout coffees per year can really add up. 

Earn extra income.

While you want to limit expenses when you can, it’s also a good idea to earn extra income if you can to more aggressively tackle your debts. Freelancing, driving a rideshare vehicle or delivering food, and tutoring students are great options you can start with easily.

Choose a payoff strategy.

First, make a list of all of your debts and organize them from either smallest balance to largest, or highest interest rate to lowest. This will help you develop a strategy to pay them off. There are several ways to pay down debt, including:

• Debt consolidation: Refinancing that entails taking out one loan to pay off many others
• Snowball method: Putting extra funds toward the smallest balance and then working up to the next-smallest balance until your debt is gone
• Avalanche method: Starting with the highest interest rate and then moving to the next-highest interest rate until your debt is gone 

How to Save for Retirement in the Short Term

Saving for retirement generally takes several years, but you can take short-term steps to save. For example, if your employer offers a 401(k) and you haven’t already set up your contributions, it may be a good idea to do so, especially if your employer matches your contributions. 

Once you’ve set up your 401(k), start increasing your contributions a bit every year. Taking advantage of 401(k) contributions can reduce taxes because the money you put into your 401(k) is taken out of your paycheck before taxes are calculated.

Your Guide to Setting Financial Goals

Choosing a financial goal and sticking to it are two different things. To make sure a financial goal is achievable, set actionable steps that will ensure you’re successful. 

Get your copy of our guide How to Set Financial Resolutions for the New Year to find out how to create achievable financial goals that change your short-term outlook while supporting your long-term financial goals.