Setting short-term financial goals can give you the confidence boost and foundation knowledge you need to achieve larger goals that will take more time. These first steps are relatively easy to achieve.
Here are some key short-term financial goals that will start helping right away and get you on track to achieving longer-term goals.
1. Plan and Set a Budget
Regardless of whether you are living paycheck to paycheck or have plenty of money left that you funnel into savings, setting a budget is still essential. Setting a budget allows you to exercise discipline when it comes to how much of your money is going to necessities, how much is going to recreational expenses, and how much is going to savings and investments.
By setting a budget — and sticking to it — you’ll be able to better control how you are able to reach your other financial goals.
2. Make a Savings Goal
Once you’ve set a budget, it’s time to set a savings goal for this year. Obviously, your savings goal should be attainable, but it should also be as large as you can manage.
Remember, the more you save now, the more that money will multiply or compound as time goes on. It’s also important to note that once you’ve set a savings goal and divided out how much money you need to put aside from each paycheck to reach that goal, you should put that money aside first and foremost.
If your savings are the first part of your budget you pay, they’ll be much less likely to get left out.
3. Pay Off Debts
The only financial goal more important than saving and investing is paying off bad debts. High interest, bad debts such as credit card debts and personal loans act exactly the opposite of good investments, decreasing your worth at a compounding rate, rather than growing it.
Paying off debts such as these should be your first priority, and it always is as good a time as any to become debt-free.
4. Keep Tabs on Current Affairs
Take some time to keep tabs on ongoing events in and around the world. This is because markets depend on these affairs and each of them has a different kind of effect on them. Using the principles of investing to find great companies to invest in takes a little time and patience.
5. Use a Financial Planner
You are 42% more likely to complete your promises to yourself if you write them down. There is a reason that I am a firm believer in making yourself promises, instead of setting goals. Beyond that, writing these promises down or looking at them daily or even weekly leads to increased motivation.
If you’ve ever heard, “Where your focus goes, your energy flows,” it’s completely true, and you can prove it to yourself.
