When you start the financial goal-setting process and list everything you’d like to do, you might be amazed at all the potential goals that will take five years or less to accomplish. These are known as short term financial goals, and they can include:
- A down payment for a car
- An online class
- A plane ticket
- A new video game system
- Dinner at a high-end restaurant
- A seminar
The only problem is that while having this many goals you’d like to achieve can be empowering, it can also be overwhelming. Which financial goals should get the highest priority, and which ones are best left for later?
That’s where this guide comes in. The following financial goals will have the biggest impact on your finances, giving you more financial stability, more peace of mind and helping you achieve even more financial goals in the future. When setting short term financial goals, keep these at the top of the list.
These are the best short term goals to set for yourself
Create an Emergency Fund
An emergency fund might not be as exciting as other short-term financial goals, but it might just be the unsung hero of financial stability. When you build up an emergency fund, you get a safety net that protects you from unexpected emergencies ranging from a car repair to losing your job. This not only helps keep you out of debt, it can also free your mind from worrying about your present day finances so you can think about your long term savings goals and plans.
Financial experts recommend putting at least three to six months' worth of living expenses in your emergency fund. However, your first goal should just be to save a portion of each paycheck. Start by trying to save 5% of each paycheck, but if money is really tight just set aside what you can afford.
Start setting your short term financial goals today!
Pay off Your Debts
Paying off debt is another less-than-glamorous financial goal, but it’s also one that will transform your personal finances. When you have debts, especially high interest debts, you’ll have to spend a significant portion of your monthly income paying them off. That doesn’t just limit what you can spend on things you like, it also limits how much you can put towards other financial goals.
A lot of debt paying strategies exist, from the snowball strategy where you pay off your smallest debt first to the avalanche strategy, where you pay off your largest debt first. You can even use a personal loan to consolidate your debts into one convenient monthly payment. Regardless of your strategy, once you’ve paid off your debts, you’ll be amazed at how much extra income you’ll have available.
Get More Income
In a world where prices are rising rapidly and getting a raise from your company is by no means a sure thing, figuring out how to bring in more money is an essential financial goal. One of the easiest ways to start is by teaching yourself new skills, which you can acquire through short courses, workshops or online classes. If you really want to take your skills to the next level, you might even consider investing in an advanced degree.
Of course, you can also build up your income by starting a side hustle, like selling items on eBay, becoming a tutor or driving for Uber or Lyft. You might even start your own small business and, if it becomes successful enough, turn it into your full-time job.
Start a Long Term Financial Goal
While it might seem strange to be talking about long term financial goals in a guide about short term financial goals, the truth is that long term financial goals are made of short term financial goals. If you’re regularly reaching financial goals that are short term, you’ll probably end up hitting your long term financial goals as well.
Examples of financial goals that are long term can include:
- Saving for retirement
- Making a down payment on a house
- Saving for your child’s college fund
Most of these long term financial goals just require saving regularly and tracking your progress until you reach your goal. As previously mentioned, many long term goals are actually several short term goals put together, so one good strategy is to divide up your long term goal into smaller short term financial goals. When you reach one of your short term goals you’ll have a clearer idea of how much progress you've made to your ultimate goal, and you’ll feel the same sense of accomplishment you do when you reach other short term goals.
Save for a Vacation
A vacation might seem frivolous, especially when compared to other financial goals. However, when you take a vacation you’re giving yourself a break from the stresses of your normal life and getting a chance to recharge physically and mentally. That can increase your productivity and effectiveness once you get back into your usual routine, and it can also even boost your motivation to reach your other financial goals.
The best part about taking a vacation is that it doesn’t have to be expensive. You can use a vacation budget to figure out your expenses for a planned vacation, then reduce the costs as you see fit until you arrive at an amount you can use for your savings goal.
Got questions about setting short term goals? Ask us!
Reach Your Short Term Financial Goals With First Alliance Credit Union
The sheer number of options you have when setting good financial goals can sometimes be overwhelming, especially if you’re trying to figure out which are the best short term goals to set first. While the answer will change slightly from person to person, you can ‘t go wrong if you focus on financial goals like starting an emergency fund and paying off your debts. You might even want to look into boosting your income or taking on a side hustle.
If you need assistance setting specific savings goals and reaching them, become a member of First Alliance Credit Union today. You can get help selecting good financial goals to save for, both short term and long term, and you can use the free downloadable SMART goal packet to put together a plan to reach them. You can even set up a separate savings account and transfer money into it regularly using our online banking platform or mobile app.
