How to Set Short-Term Financial Goals
Short-term financial goals can help you stick to good saving and spending habits. Let’s dive deeper into the benefits of these goals and how you can set them.
Why should I set short-term financial goals?
There are several reasons why you should set short-term financial goals. These types of goals can motivate you to spend less and save more. They may also make it easier for you to manage your money wisely and reduce financial stress.
Examples of short-term financial goals
Here are a few types of short-term financial goals you may want to consider:
Create an emergency fund
An emergency fund can help you cover an unexpected expense like a car repair or leaky roof. If possible, try to save three to six months’ worth of expenses and put the money in a high-yield savings account.
Pay off credit card debt
The sooner you pay off your credit card debt, the more you’ll save on interest charges. Paying it off quickly can lead to thousands upon thousands of dollars in savings. This may also significantly free up your monthly cash flow.
Pay off student loans
If you have student loans, paying them off can help you save a lot of money. This is particularly true if these loans come with high interest rates. Getting rid of your student loans can also take a large financial burden off your plate.
Save for a down payment on a house
To take out a mortgage, you’ll likely need a down payment. If you currently rent and would like to become a homeowner someday, it may be a good idea to save for a down payment. Your down payment could be anywhere from 3.5% to 20% of your anticipated home price.
How can I set short-term financial goals?
If you’d like to set short-term financial goals, follow these steps:
1. Determine your goals
Think about what types of goals you’d like to achieve in the near future. Maybe you hope to buy a house, remodel your kitchen, or take a trip across the country. Jot down these goals and keep them in mind as you develop your goal strategy.
2. Use the SMART goal strategy
SMART stands for Specific, Measurable, Achievable, Relevant, and Timely. Before you set a short-term financial goal, make sure it meets each of these five attributes. Your goal should include a timeline and be clearly defined, easy to measure, attainable, and within reach.
3. Create a budget
A budget is a plan based on your income and expenses for how you’ll spend your money. Create a budget that works for your financial situation and short-term goals. The pay yourself first budget, for example, involves paying yourself first instead of covering your bills. Another type of budget is the zero-sum budget, which requires you to choose a “job” for every dollar of your monthly after-tax income.
4. Stick to your plan and adjust as needed
Once you have created a plan to achieve your short-term financial goals, stick to it. You can change your plan at any time. In fact, there’s a good chance you’ll adjust your strategy as time goes on and you have different needs and priorities.
Meet your short-term financial goals with an Advance America loan
If you need to achieve a short-term financial goal immediately, Advance America can help. From payday loans and installment loans to title loans and lines of credit, we offer several financial products that can help you cover an expense right away. Once you fill out an application for our loans online or in-store, you may receive an instant decision and get the funds in your bank account the same day you apply.