The Short-Term Financial Goals Everyone Should Have

Most people want financial stability, but very few have it. Sometimes, we get caught up in poor money management practices, take on too much debt, or experience a crisis that is outside of our control. Thankfully, the damage from these issues is preventable. In fact, safeguarding against these issues is one of the first steps to creating financial stability. The key is to establish short-term financial goals that will put you on a path to financial health. Remember, short-term financial goals can be achieved pretty quickly, but they are also not as significant as long-term goals like retirement savings. The important thing about short-term financial goals is that they make long-term goals possible. Let’s take a look at the short-term financial goals that you should be working toward.

Build emergency savings

This is the most important of our short-term financial goals because it can protect you from the unexpected. Many consumers are just a car accident or a doctor’s visit away from being in serious debt. Most of us never “see it coming” when we are hit with a big bill. By building a “cushion” in the form of an emergency fund, we can rest east knowing we can handle the unexpected.

The easiest way to make an emergency fund is to look for places to save in your budget. Obviously, you need to be paying your debt and other obligations, and these should be top priority. Discretionary spending, or the part of your budget that doesn’t contain obligations, is where you will want to take a closer look.

This includes going out to eat, entertainment, and travel. Essentially, this is the “fun” part of your budget. You will need to look for cheaper alternatives to expensive activities so that you can begin putting more toward the emergency fund. You will also likely be able to save in other areas as well, such as by using coupons to save on your grocery budget.

[Related: Check out the Feed a Family for $5.55 Cookbook]

So how much money should you have in your emergency fund? We recommend about six month’s worth of income. But this goal isn’t really a “short-term financial goal.” For starters, look to save up about three months worth of living expenses. Then work up to the goal of saving six months of income.

Pay down Credit Card Debt

If you have credit card debt, you should make getting rid of it a priority. Credit cards have high interest rates and the debt has a way of “hanging around.” There are a few steps you can follow to decide how you should go about paying off the debt.

Step 1: Organize your debt
Use the debt payoff table to keep all your information organized and ensure that you don’t miss a payment.

Step 2: Determine your debt to income ratio
Your debt-to-income-ratio can help determine if you can pay off debt on your own or if you need professional assistance.

Step 3: Use a DIY Method
You can try to pay off debt fast with the ladder method or use the debt snowball.

Step 4: Credit Counseling
In a free credit counseling session, your counselor may recommend a debt management program. The program typically takes about five years and allows you to pay off all of your credit card debt at reduced interest rates. Learn more.

If you have a lot of credit card debt, paying it off isn’t going to be a short-term financial goal. In fact, it could take years. But recognizing the problem and getting the appropriate help are extremely important if you want to get back on track.

Generate Income

If you already have a full-time job, then you might be in good shape. If not, one of your primary short-term financial goals should be to pursue employment. Obviously, full-time employment with benefits is ideal (that’s what everyone is looking for).

But you should strongly consider taking part-time jobs, volunteering, and taking on jobs that will give you experience. This experience might be what eventually lands you a full-time gig.

If you are already working but your budget is tight, there are many side jobs that generate extra income. Consider getting one of these. That extra money can go toward your debt payments or emergency fund and will make your budget more comfortable.

Improve Your Financial Management

This just might be the most underrated of our short-term financial goals. “Getting organized” sounds boring, but it’s actually one of the most important things you can do.

Create a small business center in your home where you can keep all of your important financial information. Have a calculator, and maybe even a computer, handy too.
Keep a file box that is organized by your various financial accounts, and update it regularly.

Then, get in the habit of using this space when you pay bills, review account information, or do any other financial “business” in your home. You might be amazed to see how much more convenient it will be to manage your finances.

Need More Help?

These are just a few suggestions of short-term financial goals. The most important is to begin creating an emergency fund so that you are ready for anything. And, of course, try to pay off that high interest debt, so you can put more of your money towards other needs and wants. If you need any other help with your financial goals, or would like to sign up for a free counseling session and budget review, get started now.

Did we miss anything? Tell us about your short-term financial goals in the comments below!

Thomas Bright is a longstanding Clearpoint blogger and student loan repayment aficionado who hopes that his writing can simplify complex subjects. When he’s not writing, you’ll find him hiking, running or reading philosophy. You can follow him on Twitter.

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