Over 50% of the people who make New Year’s Resolutions say their goal is to save more money. If this is you, then I hope this list of short-term financial goals will give you some great targets to shoot for!
In this guide, I will give you a quick primer on my personal goal-setting process. This will give you a sneak peek into how I set short-term goals and make progress on them. However, before I reveal my ideas of short-term goals you can steal, let’s have a quick refresher.
- What Are Short-Term Goals?
- How to Set Short-Term Goals In 5 Quick Steps
- 21 Short-Term Financial Goals For Building Wealth
- 1. Create an Emergency Fund
- 2. Increase your 401k / 403B / IRA Contribution
- 3. Increase your Savings Rate
- 4. Increase Your Income
- 5. Cut $300 From Your Monthly Spending
- 6. Save Money Without Trying Any Harder
- 7. Build the Habit of Tracking Your Spending
- 8. Grow your Net Worth
- 9. Improve your Credit Score
- 10. Transfer to an Online Bank
- 11. Create a Debt Payoff Plan
- 12. Be Free From Consumer Debt
- 13. Make a Budget
- 14. Get on the Same Team With Your Spouse
- 15. Get Rid of PMI
- 16. Give More to Others
- 17. Start a Side Hustle
- 18. Have the Right Insurance Coverage
- 19. Rent Out Your Vacation Home
- 20. Start Investing
- 21. Learn About Personal Finance
- 5 Reasons Why You Need Short-Term Financial Goals
What Are Short-Term Goals?
Short-term financial goals are objectives you set for yourself to achieve within a year or less. These goals tend to be more immediate and practical and often help you and your family plan and manage your finances daily. Examples are paying off your credit card debt or saving for a vacation.
You should not confuse short-term financial goals with long-term ones you hope to achieve in a few years. Long-term goals include putting more in your retirement account, buying a house, or saving for your child’s education.
However, most short-term financial goals will help you achieve your long-term goals.
How to Set Short-Term Goals In 5 Quick Steps
1. Access Your Current Financial Situation
Before setting short-term goals, you must stock your current money situation. This will help you know which goals to prioritize and which you can get to later.
For instance, if you have a lot of high-interest debt, you might want to start paying them off before building your rainy-day fund.
2. Visualize the End Destination
In order to set short-term financial goals, you really have to have a good idea of what you want your end destination to look like. Are you trying to be financially independent? Then you need to start saving and investing more.
All of these things are future states that you can reach.
2. Set Goals That Help You Reach Your Destination
Once you know where you’re trying to go, you need to set short-term financial goals that will help you get there faster.
If your goal is to be financially independent, how much money do you need to save up?
If you want to be healthier, how much weight do you need to lose?
3. Create Bub-goals
Once you have your major financial goals set up, the next step is to create sub-goals or shorter-term targets to get there.
For example, If your goal is to pay off all your credit cards, you can start by paying off the smallest debts first.
If you need to buy a house, start by making the first down payment.
The more of these smaller goals you’re able to check off, the more motivation you’ll have to chase after the long-term ones!
4. Break it Down
This step is the most important. Most goal-setting breaks down at this point, but this is where the magic happens.
The ONE thing you have to do once you have your goals set is to break them down into actionable steps. The key is to create habits and identify processes that will get you there. Some of these can be automated, which will help you reach your goals even faster!
Here are some of the daily/weekly habits that have helped us build wealth:
- Meal prep every Sunday using these 50 cheap meal prep recipes
- Check our credit card statement each month for fraud
- Have a monthly date night to discuss our finances
- Track our spending using a shared spreadsheet
- Call our banks to increase our credit limit every 6 months
- Automate our retirement savings
- We use ebates & ibotta to save money on everything we buy.
Now, let’s dive into our list of short-term financial goals you can set for yourself.
21 Short-Term Financial Goals For Building Wealth
1. Create an Emergency Fund
One of the best short-term financial goals and the #1 place you might want to start is making sure your emergency fund is fully funded! An emergency fund is key to protecting your finances and building up your financial resiliency.
An emergency fund can protect you in case of job loss, an income drop, or any major unexpected expenses.
My goal here is to help people take control of their finances and establishing a healthy emergency fund is the first step I recommend to people. This is a great financial goal to check off your list this year.
Want more? Check out my Ultimate Guide to Emergency Funds. You’ll learn…
- How big of an emergency fund you need
- More reasons to start one
- How to start one
- Where to keep it
2. Increase your 401k / 403B / IRA Contribution
If you’ve got your rainy-day fund taken care of, then the next short-term financial goal should be to funnel as much cash into your retirement investments as possible.
While most employers will encourage you to do this, you need to set a balanced financial goal for yourself to increase your retirement savings by a certain dollar amount or percentage increase!
So if you saved 10% of your income last year, then shoot for 15-20% this year! Or, you can set a goal to increase your savings by a dollar amount like $150 more a month into retirement.
One of my financial goals this year is to increase our contributions to our 403B accounts (the non-profit equivalent of a 401k). This allows us to save money without paying taxes on it! We also contribute to a Roth IRA and I’m hoping to make this my fourth consecutive year to max it out!
If you’re new to trying to save money, check out this guide to investing in the stock market!
3. Increase your Savings Rate
Your savings rate is the gap between how much money you bring home each month and how much of it you are spending. Spending money is okay, but you need to start saving more.
So if you’re making $4,000 a month and spending $3,000, then you are putting $1,000 a month in your savings account, giving you a savings rate of 25%.
The higher your savings rate, the more cash you have available in your savings account to put to work for you! You can use the money to pay off debt, save for retirement, or towards any long-term goals like a house down payment, or a college fund for kids. You might have to practice living stingily and have strict annual financial planning to buckle down on your savings!
Increasing your savings rate is one of the best financial goals for everyone because it means you have more money in your savings account to put to use for you!
There are two parts to the savings rate equation. You can either make more money or spend less. If you’re just starting out, I highly recommend doing both!
Take our savings rate challenge!
Here are 20 money moves to make to help you boost your savings rate! My buddy Forrest wrote a guide on how to help you make $1000 fast.
4. Increase Your Income
If you’re really trying to improve your finances, increasing your income by far has the biggest long-term payoff. A $5,000 raise, invested over time, will add up to hundreds of thousands over a 30-year career.
We’re taking this year to build up this blog and hopefully turn it into a small income stream. We aren’t expecting anything major as we only devote 5-10 hours a week to the blog, but even $250-500 a month would be a game changer for us.
This year, we’re trying to increase our income by creating multiple streams of income. One major way to increase your income over the long term is to go to grad school. My buddy Robbie recently wrote up a guide talking that is super helpful talking about “Is an MBA worth it?”
Try selling covered calls, this is a strategy that can increase your investment by 1% to 5%.
5. Cut $300 From Your Monthly Spending
The easiest way to start building wealth is to decrease your spending! You may not have control over increasing your income, but the way you spend your hard-earned money is.
If you were able to cut your spending by a few hundred dollars a month, that would add up to a huge amount of money over a lifetime of savings.
Start by cutting stuff that gives you a high return on effort, get some easy wins, and then work on the high effort–high impact section!
6. Save Money Without Trying Any Harder
This is a bit of a unique financial goal, but it’s one we’re working towards. We’ve never really taken advantage of all the great savings apps out there, but this year we want to!
If we can start saving an extra 5-10% on all purchases through cashback or discounts, we’d be crazy not to! The goal is to put more money in your savings account.
These are the 3 apps we’re using this year:
Ibotta: Great for saving money on groceries and consumer products
Ebates: SUPER easy to use website extension. Anytime you are shopping online, all you have to do is click the button in the top right and get cash back. There are lots of apps to make money fast that can help you boost your savings!
Travel Hacking: Travel hacking is one of the best ways to save money without actually having to try! All you have to do is open the right kind of credit card and don’t increase your spending.
7. Build the Habit of Tracking Your Spending
The first question I ask anyone who wants my help with finances is simple: “Tell me how much you spend each month in each area of your budget. Give me a breakdown of how much you spend, save, etc.”
Most people don’t know this information.
But it is key to really making financial gains. The act of tracking your spending will almost automatically encourage you to spend less.
I recently came full circle again on tracking my spending after realizing that we weren’t making as much progress on our financial goals as we should be. We got back into the habit of tracking our spending and we’ve already seen the results.
I don’t know what it is about human nature, but when we track and measure the things we are trying to improve, we tend to make small decisions and choices that align with our financial goals.
Think about it… If you’re trying to lose weight, the act of actually tracking your calories will inspire you to make smarter choices throughout the day.
Tracking your spending doesn’t have to be a forever habit, but until you take the time to know how your spending breaks down, you really don’t have an accurate picture to work from.
8. Grow your Net Worth
Everyone wants to build wealth and the typical measure of that is your “net worth.” There are a bunch of different ways to calculate financial worth, but we keep ours simple.
We add up all of our liquid assets like cash, checking account, savings account, and all of our investment accounts. Then we subtract out any non-mortgage debt that we have.
Growing your net worth is a realistic goal but at the end of the day, it’s only useful for seeing big-picture trends over time. If you’re heavily invested, then the stock market changes so much over time that you really don’t have much direct control on how your net worth performs.
The key to growing your book value though is to increase your savings rate (#3 above). The more money you have to invest and pay down debt, the more your net worth will grow over time.
My wife and I are trying to front-load our retirement savings! At our current pace, we should hit the $1 million mark by the time we turn 38. How long will it take you to save a million dollars?
9. Improve your Credit Score
We live in a world where a great credit score is a necessity. Your credit score is basically a measure of our trustworthy you are in the eyes of a lender. They want to have an assurance that you will be able to pay back whatever you borrow.
A credit score measures that, as best as it can.
It takes into account factors like how many credit accounts you have, how long of a history you have, how consistent you are in making payments, and how much of your available credit you use.
The higher your credit score, the better interest rate you can potentially get,
If you are planning to buy a car with your salary or home in the next couple of years, you absolutely need to make improving your credit score a top short-term financial goal!
10. Transfer to an Online Bank
Tired of earning nothing in your cash accounts? Want to get more than 10 cents a year in interest from your bank?
It’s time for you to switch to CIT.
You see, big banks like Wells Fargo and Bank of America pay you next to nothing in interest (.01-.06%) while online banks like CIT will pay you 1.85%.
The best part is that once you switch, it takes no additional, long-term effort from you. One and done and you’ll forever be reaping the benefits.
If you are still with a big bank, it is TIME TO SWITCH. Get paid more in interest, invest it, save it, and do whatever the heck you want with it. Just make sure you get that money!
11. Create a Debt Payoff Plan
If you’re weighed down with debt, then the #1 thing you need to do is come up with a debt reduction plan. The sooner you get rid of the highest-interest debt, the sooner you’ll be less anxious, have more financial freedom, and be able to save for retirement and everything else.
The reality is, WAY too many people who are stuck in debt have no plan to pay it off.
The key is to create a plan that works for you–that you will stick to. If you have too much debt and need a feasible strategy to pay it, you can work with a financial advisor and see the best way forward.
12. Be Free From Consumer Debt
Personally, I don’t think any debt is “good debt,” but some debt can be used at a risk to use for certain purposes.
Consumer debt like credit cards, store credit cards, car loans, personal loans, etc are the FURTHEST thing from “good debt.”
Do yourself a favor and do everything you can to become free from consumer debt. This should be a top short-term financial goal. The higher-than-average interest rates on credit cards are an anchor holding you back from saving and reaching your financial goals.
My wife and I have about $4,000 left on our car loan and while our mortgage has a higher interest, we are eager to get another $330 back every month by paying it off.
13. Make a Budget
The key to reaching any of these financial goals is to have a budget that actually reflects what you are hoping to accomplish.
Whether you’re struggling to make ends meet or you make plenty of money but don’t know where it’s all going–you absolutely, 100%, without a doubt, need to make a budget.
I really can’t beat this drum hard enough.
If you want to reach your money goals, you have to have a plan and a process to get there. Budgeting is the plan and tracking your spending is the process.
If you aren’t willing to do either one of those, then you really just don’t care enough.
14. Get on the Same Team With Your Spouse
There’s no question that money is one of the biggest points of conflict for married couples. If you and your spouse are always fighting about money, then it is time to get on the same team.
This was by far the most impactful thing for our financial success. No budget hack or investing tip will save you more money than being unified with your financial partner.
I’ve put together a list of 9 Tips on How to Navigate a Spender-Saver Marriage. My wife and I are trying to build generational wealth to pass down to our kids and create a lasting legacy of giving.
15. Get Rid of PMI
If you own a house, then chances are, you’re paying PMI (private mortgage insurance). Almost everyone who isn’t able to put 20% down is forced to pay this to give their lender insurance.
Right now, we’re paying PMI every single month, and trust me, I am NOT happy about it. But I love our house and am totally stoked to be building equity, hosting people, and enjoying life.
If you are paying PMI each month like us, that is money being poured down the drain that could be going towards reaching all of your financial goals.
We only put 5% down on our house but thankfully, we were able to build some extra equity by making some improvements on the front end through a 203K loan.
If you’re hesitant about home ownership, check out this guide on whether or not you should rent or buy a house.
16. Give More to Others
As a Christian, I believe that giving is one of the greatest joys and responsibilities that we are commanded to do. There’s no doubt that we’re called to care for the poor and needy, serve with our time, and give generously.
But giving is not only for Christians.
We should all aspire to give more and to bless others, especially if we have a decent handle on our finances. It can be tempting to be selfish, hoarding away money for yourself as you try to reach your financial goals.
But personally, I wouldn’t want to accomplish any of the financial goals on this list unless I was giving along the way.
So, open up your blinders and consider how you can help others around you. Don’t be so laser-focused on your own goals and dreams that you neglect looking at those around you who are suffering.
17. Start a Side Hustle
One of the best ways to increase your income is to make some extra money on the side. These days, there are hundreds of potential side hustles or side gigs that will allow you to earn enough money to cover your living expenses.
The challenge is finding something you enjoy that you can get paid for.
I work hard all day at work and in grad school. The last thing I want to spend my spare free time doing is surveys or donating plasma.
I want to spend my free time building something that will last. I want to create something that takes effort up front, but that I can continue to reap the rewards from.
This is one of the reasons I started a blog. If you need money now, blogging is NOT the answer.
But I know that I have the pieces in place for this blog to supplement our full-time income. My hope is to keep on creating a bank of incredible articles to help people save more, earn more, and take control of their finances.
The goal is to end this year by making $500 a month consistently from the blog!
18. Have the Right Insurance Coverage
I have probably said this before. Having good insurance coverage to protect yourself, your loved ones, and your assets, is in my opinion, one of the most important short-term financial goals you can have. I am talking about health insurance, life insurance, and property insurance.
Health insurance will help you cover the cost of medical care, while life insurance can provide financial support to your loved ones in the event of your untimely death. On the other hand, property insurance will protect your home and other assets from damage caused by natural disasters or other events.
If you do get a cover, make sure to review your coverage and update it as necessary regularly.
19. Rent Out Your Vacation Home
Owning a vacation home can be a great asset. However, it can also be costly to maintain when you are not using it. That’s why renting it out to others can be a great way to generate additional income and offset some of the other monthly expenses you might have.
This can be a great short-term financial goal if you’re looking for ways to increase your income in the short term. Before renting out, consider the legal regulations of your location, insurance, and possible tax implications.
20. Start Investing
Investing money is the best way to grow your wealth over time and enjoy some financial freedom. Investments, whether short-term or long-term, can help you build your savings and create a nest egg for the future.
You can make many different types of investments, from stocks and bonds to real estate and precious metals. It’s a good idea to start small and invest in a diversified portfolio that matches your risk tolerance and financial goals. It’s also essential to research and consult a financial advisor before making any investments.
21. Learn About Personal Finance
Sticking to your short-term financial goals will be hard if you don’t have the proper financial discipline. One way to ensure you have this discipline is to learn the basics of personal finance.
This can include learning about budgeting, saving, investing, and understanding credit, taxes, and other financial concepts. There are many resources available to help you learn more about personal money. These include books, online tutorials, and courses, just a few examples.
It’s essential to learn about how to manage money, plan your budget, and ultimately how set feasible long-term and short-term financial goals. You can talk to a financial advisor if you prefer someone to guide you.
5 Reasons Why You Need Short-Term Financial Goals
Short-term goals can help you to focus on the steps you need to take to achieve your longer-term financial objectives. That said, here are five reasons why you might need to set short-term money goals.
- Short-term financial goals provide a sense of accomplishment: Accomplishing a short-term goal can give you a sense of satisfaction and motivation to continue working towards your longer-term financial objectives.
- They help you build momentum: By setting and achieving short-term financial goals, you can create a sense of momentum that will help you stay on track and continue working towards your long-term financial goals.
- Short-term goals help you stay focused: Having specific short-term financial goals can help you focus on the steps you need to take to achieve them rather than becoming overwhelmed by the big picture.
- Short-term goals are more manageable: Long-term financial goals can sometimes seem daunting or unattainable. By breaking them down into smaller, more manageable short-term goals, you can make achieving them less intimidating.
- They can be stepping stones to long-term goals: Many short-term financial goals are stepping stones to bigger long-term financial goals. For example, paying off a credit card balance may be a short-term goal that ultimately helps you achieve your long-term goal of paying off all of your debt.
As with long-term financial goals, it’s important to set specific, measurable, attainable, realistic, and time-bound (SMART) short-term financial goals. You will also need to have a good plan to achieve these goals.
Again, you can review this with a financial advisor who can help you understand which financial goals you should prioritize.
Don’t forget to review your progress and adjust where necessary regularly.