If you’re someone who wants to set and achieve financial goals, you need to develop the right money habits to help you throughout the journey. And that’s only the start. You also have to find the best saving strategies, trusted payment plans, and even good income streams to support you.
Dreaming of buying your own home outright? Retiring early with a million dollars? Hold back. Those are long-term goals. Let’s focus on smaller ones that can help motivate you to get the bigger tickets. So, in this blog, we’ll help you identify the best short-term goals to set and some tips on how you can achieve them in less than a year.
Create a budget to live by
Creating a budget should not be that hard, especially if you’ll be budgeting for yourself. You can start by determining how much you are making in a month and the things you spend. These two important things can readily set you off to making smarter money choices for the upcoming months. It’s also helpful to identify your top three biggest variable expenses and learn how to reduce them.
Clear out credit card debt
If you’re young and love to shop around, you might find this goal hard to get done. But trust us, this is one of the top debts you don’t want to carry until you are about to retire. In general, credit card debt involves hefty late fees and stressful interest rates. Just think about how much you can save from paying down credit card debt and putting all your extra money on your savings. You’d also want to stop using your credit card for huge purchases that you know you can’t pay off right away. To maintain a good credit score, you can consider using just 30% of your limit to ensure you can pay it off instantly.
Open a retirement account
Another easy short-term goal for you is to start saving for your retirement. If you’re currently employed and still haven’t started contributing to 401k, make sure to ask a human resources representative for details. You can begin by contributing up to the match of your employer and increase it every year. If this option does not apply to you, you can opt for an Individual Retirement Account or IRA and put your savings in there.
Build an emergency fund
If you haven’t started an emergency fund yet, now’s the time to do so. Ideally, it must have at least three to six months’ worth of expenses. The goal here is to have enough money to support you or your family for unwanted financial problems. For instance, you are the breadwinner and lose your job, or your family car requires dyno performance tuning or extensive repair. Whatever it is that you can afford to pay outright. Keep in mind that expenses change over time, so make sure to continue building your emergency fund. Thinking of one year’s worth of expenses? Now, that’s better!
Start saving more money
An emergency fund is just one of the saving goals you need to have. You also need to think about building a strong financial future for yourself. By mastering your monthly budgeting and cutting off your biggest debts, you can start saving for more important things. This could depend on your goals or financial situation. But ideally, it’s better to start saving for travel plans, personal funds, down payment for a house, healthcare, or investment plans. In case you don’t want your emergency savings to be used when you lose your job, you can create a separate loss-of-job savings fund for it.
We’re not saying you should stop spending on anything. We’re suggesting that you start living with a mindful pocket. Being smart with how you manage and spend your money can do wonders for your finances. You can consider starting with frugal living, wherein you learn how to spend only on things that matter to you most or those of great value to you. Living with less, saving more.
You can cut your unnecessary subscriptions and open multiple savings accounts instead. You can embrace thriftiness and find the same quality pieces that are way too expensive on high-end boutiques. There are many more cost-cutting practices that you can adopt without losing the quality of living.
Considering all these short-term financial goals might seem overwhelming at first, but we promise the road gets easy once you master budgeting and saving. Start being mindful of your expenses and always avoid making more debts (please try). Practicing these tips is your way to achieving financial independence!