Setting clear goals to attain financial stability is extremely important as it not only steers you in the right direction but also helps you achieve life goals like buying a house or sending your kids abroad for studies. However, it might take several years for you to achieve that stability. Meanwhile, it is important to set short-term financial goals that are relatively easier to achieve. Through these goals, you can visualize your financial success, and the small wins keep you motivated.
The short-term goals can range from paying off credit card debt to saving for vacations. Hence, it is important to set your goals according to your current financial situation. For instance, if you don’t have enough money to buy a car right now, you can set a goal for the end of the year and try to cut down on unnecessary expenses and save a portion of your salary every month.
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Here are some points you should keep in mind if you want to achieve short-term financial goals.
Set your goals
Setting a short-term financial goal begins with specifying what you wish to achieve and why it is important. When setting a short-term goal, be specific instead of thinking about improving your financial health in a general sense. Make your goals measurable. For instance, if your goal is to pay off credit card debt, it’s important to know the exact amount so that you know if you can easily hit your goal or not, especially if you have multiple credit cards. You also need to put a plan in place to achieve the goal. For example, to pay off your credit card debt, you can consider taking a personal loan. You can compare loan offers on Paisabazaar Platform and choose the one that best matches your requirement.
Set a realistic target
A budget is the cornerstone of financial planning. It gives you a clear picture of your income versus expenses, helping you identify how much you can realistically save. So, if you are setting a goal for the first time, it would be wise not to set a very ambitious target, as it could be difficult to reach the goal. You must always set realistic goals as per your financial capability. You can start by listing all your sources of income and finding areas where you can cut back and focus on gradually increasing your savings. For instance, if you plan to buy a luxury car next year, you can start keeping aside a portion of your income into savings and can set a short-term goal of saving for its down payment.
Give yourself a deadline
To stay committed towards achieving your short-term goals, setting a deadline is important. A deadline acts as a motivator and helps you stay focused and disciplined. However, you should always set a realistic deadline for your goals, considering how much you need to save according to your current financial situation. Also, keep a check on your progress to make any adjustments, if required. For instance, if you need to save Rs. 1,00,000 for a vacation six months from now, you can start by keeping aside Rs. 15,000 each month. But if you think setting aside this amount is too much for you, you can extend the deadline from six months to a year.
Build your investments around your priorities
Once you have set your short-term financial goals, create strategies to invest for these goals that could potentially yield returns more quickly. However, remember that all investments carry risk, and it’s important to choose options that match your risk tolerance and time frame. For instance, if your goal is to buy a new house in the next one to three years, keeping your money in a safe place where it can earn a higher return could be beneficial.
Consider unexpected expenses
Life is unpredictable, and sudden expenses can arise at any time. Also, your priorities may change over time due to certain circumstances. Perhaps a sudden job loss or a family emergency can impact your budget and shift your financial focus. Hence, you should always make room for these unexpected expenses in your short-term goals and remain flexible with your goals. To accommodate such expenses, you can either extend your deadline or set a target to save more than the usual amount for a few months.
Start a side hustle
To achieve your financial goals, you should either cut down on unnecessary expenses or increase your income. So, if your current income is not sufficient and you are unable to save enough to achieve your goals, consider starting a side hustle. This could be anything from freelancing, selling handmade goods, or part-time work as per your skills or interests. A side hustle can boost your income and make it easier to reach your financial target without compromising your regular expenses.
Achieving short-term financial goals is not only about rigorous saving but also about being strategic regarding your financial decisions. Setting and achieving short-term goals can help you achieve bigger goals, like buying a house. Hence, it is important to set realistic goals and celebrate small wins.