When planning for a successful and secured financial future, it is important to have a clear set of goals. A good place to start is to determine your short-term and long-term goals. Short-term goals by nature are easier to accomplish and can fuel the much-needed motivation to achieve the long-term ones. Below, we listed some of the short-term goals you can set for yourself:
Starting an Emergency Fund
As the COVID-19 pandemic continues to wreak havoc in the lives of billions of people around the world, your emergency fund should take priority over everything else. A general rule of the thumb is to set enough money that can cover at least six months’ worth of living expenses. Ideally, for small business owners or those employed in higher-income sectors and industries, a 12-month safety net may be more advisable.
Tracking Your Spending Habits
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Brainstorm your short-term and long-term goals and create an actionable plan. Your financial goals don’t all have to be in a form of savings. One great short-term goal that will help you achieve financial stability is to track your spending habits. You can use a spreadsheet, app, or a notepad to keep up with your monthly bills and daily expenses, and find avenues where you can tighten up and save. In the long run, you can lessen the risk of falling into the trap of debt.
Creating an Additional Stream of Income
Another excellent short-term financial goal is building multiple streams of passive income. Whether this means picking up a side job on your days off or teaching kids for extra cash, you will soon see your goals coming together, making you more resilient, and being able to weather unexpected economic shocks.
Buying Health Insurance
Health insurance is one of those things that most people never think about until there is an important life event that pushes them to buy it. But with the increasing number of people struggling to afford health care, having good insurance is more important than ever. Making insurance an ultimate goal will pay off in the long run when emergencies arise.
Paying Down Credit Card Debt
Revolving debt comes primarily from the interest on credit cards and it can make achieving other financial goals much harder. No matter how overwhelming it may seem, paying off your credit card debt should be on top of your goals.
Learn About Stocks and Investments
The journey to financial independence is a tough one, and it requires a lot of patience, discipline, and planning. Learning to set investment goals can help you make sound financial decisions in the future. If you do your research and due diligence, you should be on your way to building your long-term road map to a financially secured future.
While day-to-day spending tends to occupy our minds, it is important to focus on bigger goals. Setting a financial goal can help you remain focused on the bigger goals and avoid things that are second priority.