This post is all about 10+ life-changing short term financial goals for a successful 2024.
Estimated Reading Time: 9 minutes
As we step into 2024, our collective focus is on making this new year truly OURS, right?
Usually, my mind goes straight to health and hitting the gym, but what about our financial well-being? Is there a membership card for that?
Well, not exactly. But much like the gym, nothing changes if we do not put in the effort and have a plan.
Even if you’ve set financial goals in the past, it’s good practice to revisit them, especially after significant life events like changing jobs, getting married, or welcoming little ones.
But I get it; life gets busy, and sometimes there’s not enough time in the day.
That’s why having an easy checklist makes it easier to remember all the stuff we might not think about every day. With a new year comes another opportunity to revamp our financial well-being, setting ourselves up for a year of thoughtful decisions and maybe even some life-changing goals.
I hope this list will serve as a good starting point for all. Let’s get started on making this new year OUR year.
What are Short Term Financial Goals?
Simply put, short term goals are something you want to accomplish sooner rather than later.
I bring this up because the specific time frame for a short-term goal can be a bit controversial. Some sources claim it’s any goal achievable in 12 months or less, while others argue it’s between 3 months to a few years.
There are even conversations about labeling five years as a long-term goal.
I view long-term goals as more of a 10 to 15-year plan, with medium-term goals falling in the 5 to 10-year range, and short-term goals being anything 5 years or less.
Of course, this is my take on it, and opinions may vary. There’s no right or wrong answer – every timeline is unique to the individual, and it all depends on what you’re aiming to achieve.
For instance, I write down daily goals to help me get through the day. Those would fall into the short-term category.
However, I don’t equate daily short-term goals like unloading the dishwasher with something as significant as estate planning.
So, how you categorize your goals is really up to you.
Why are short term financial goals important?
Short-term goals are important because they are the stepping stones that push you toward your larger, long-term aspirations.
It would be tough to envision achieving one of your long-term goals, like retiring at 45, for example, without giving some credit to your short-term goals that supported the journey.
Whether it’s tackling debt or spicing up those savings, short-term goals lay the foundation for long-term financial success.
It’s all about making each step count!
How to Set Short Term Financial Goals?
I think to achieve the short term financial goals you set, you have to find the perfect mix of art and science.
You can meticulously plan it on paper, follow the SMART formula, and take all the necessary steps, but let’s face it — life doesn’t always unfold in the neat, positive linear line we imagine.
Even with life’s unexpected challenges, having specific criteria for every goal is crucial. It allows you to check in, measure your progress, and decide if any adjustments are needed.
So, to strike that perfect balance, the SMART formula serves as the science-y part of the equation. It is a widely recommended method for dissecting your goals that stands for:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
It ensures your objectives are crystal clear and within reach, offering a sense of direction and purpose. So, while life might not always follow a straight path, having SMART goals gives you a solid foundation to navigate any obstacles.
What Are Good Short Term Financial Goals?
Now, let’s dive into the meat and potatoes of the matter. Can you tell I’m writing this on Thanksgiving Day?
What constitutes life-changing short term financial goals for 2024?
Here is a curated list to start your journey:
Create or Revisit Your Budget
Creating and sticking to a budget remains the foundation of financial success.
It might sound like a simple concept, and yes, you’ve probably come across it on every blog you’ve clicked on.
But you know why it’s everywhere?
Because, in my opinion, no one has ever achieved their financial goals without it. This article claims that 94% of individuals with a net worth in the millions adhere to a budget and manage to live below their means.
A budget does more than track your spending; it gives you a full picture of your finances. So, while it might seem like a cliché, the power of budgeting can’t be overstated.
Read 1 Personal Finance Book a Month
I always say, “There’s no such thing as fear; there’s only a lack of knowledge.”
I didn’t come up with that gem myself; I definitely stumbled upon it in some book. Google searches left me uncertain about the quote’s origin, but here’s my favorite rendition:
“Nothing in life is to be feared; it is only to be understood. Now is the time to understand more so that we may fear less.”
Marie Curie
Now, let me get to my point.
Knowledge is a powerful tool when it comes to the world of finances. Interestingly, many individuals avoid investing not because they fear potential losses, but because they think it’s only for experts who know what they’re doing.
But, I think that’s what they want us to believe.
Committing to reading one personal finance book a month can expand your understanding, offer valuable insights, and empower you to make informed choices – no financial planner is required.
While some may choose to hire a financial planner, it’s equally important for all of us to be knowledgeable enough to understand the decisions being made with our money.
Not a fan of reading? No worries, try audiobooks.
And if you’re anything like me, consider task stacking.
In short, it’s a technique for building new habits by stacking new tasks onto existing ones, such as your daily commute or household chores.
Take the opportunity to listen to audiobooks while doing tasks like unloading the dishwasher or folding laundry. Stack your new habit on top of your existing routines to double your productivity and soak up some new knowledge without stretching the day to 25 hours.
Secure Your Future
Let’s recall the last time you checked your 401(k) account.
For me, the automatic withdrawal from my paychecks has become so routine that sometimes I forget it’s even happening. Take a moment to look into your accounts and ensure you’re still on track for your planned retirement, whenever that may be.
Verify that your retirement age aligns with your retirement goal. If not, take this opportunity to make adjustments.
Contributing the maximum allowable amount to your retirement accounts ensures a more secure and comfortable future. It’s a proactive step toward achieving financial independence in the long run.
Work on Your Credit Score
Take the time to pull your credit report via your bank or credit card provider. If your bank providers do not offer this service, remember that you have the right to request one free copy of your credit report each year from each of the three major consumer reporting companies by visiting this website.
A poor credit score can limit your opportunities, hindering your goals like investing in real estate, buying your first home, or sometimes even renting an apartment. Take the time to check what you can improve and monitor any activity that may not belong to you to ensure a healthy credit score for those milestone purchases.
Evaluate High-Interest Debt
Monitor market interest rates to identify potential savings. If you currently carry high-interest personal loans, auto loans, or credit card debt, the optimal approach would be to pay it off as soon as possible, although that might not always be realistic.
Consider easing the burden by lowering your interest rates instead.
Explore balance transfer offers that your credit cards might have available, where you pay a small upfront fee for the transfer, making the payoff journey a bit more manageable. Some credit cards offer 0% interest for 18 months with a 3% fee.
For instance, if you have $7,000 in credit card debt at a 28.99% interest rate (yuck), you would need to make 18 payments of $488 to clear it, paying approximately $1,536 in interest. By transferring your balance at a 3% fee in exchange for 0% interest, you’d pay a one-time fee of $210 and save approximately $1,326 in interest.
By exploring options to refinance or consolidate high-interest loans, you may find opportunities for better terms, lower interest rates, and ultimately, more control over your debt payoff journey.
Reassess Your Coverage
Check-in on your life insurance coverage, or consider purchasing one if you haven’t already.
Life happens, and circumstances change. When they do, so should your life insurance coverage.
Evaluate whether your policy aligns with your current needs and future obligations to loved ones. Allocating time for an annual insurance checkup is super important, so try to conduct a yearly review at the same time each year. Starting this habit during your birthday month is a great option, or you can choose January to kickstart the New Year on the right note.
Check on Your Emergency Fund
I’m a huge advocate for enjoying life throughout your financial journey, not just at the end. However, an essential step is having a well-funded emergency fund, and this can be often overlooked.
In light of this, let’s establish savings goals for your emergency fund, guaranteeing it can handle unforeseen expenses. Make it a priority this year to create a safety net for you and your family.
RELATED POST: 9 EMERGENCY FUND MISTAKES YOU WILL NEVER MAKE AGAIN
Since the money in an emergency fund should remain untouched, it is recommended you place it in an account that can offer you a good interest rate. Some HYSA interest rates can be as high as 5.25%
Save for the Holidays
Don’t wait until December to start saving for the holidays. Better yet, set a goal to have funds ready for those Black Friday and Cyber Monday sales. This will allow you to enjoy discounts on the gifts you plan to buy anyway.
Making the holidays holly jolly is much easier when you’re putting away $50 a month for gifts, rather than entering the new year with holiday debt looming over your head. That doesn’t sound like a fresh start to me.
Consider creating a sinking fund category specifically for your holiday gifts. Let your High-Yield Savings Account (HYSA) assist you in growing your funds, ensuring you have enough money saved when it’s time to go shopping.
Monitor Mortgage Interest Rates
Ensure you’re keeping an eye on the current mortgage interest rates, especially if you bought a home anytime between mid-2022 to 2023 with a 7-8% interest rate.
I use this website to check today’s mortgage rates.
While the possibility of interest rates dropping below 5% seems unlikely, it’s worth staying watchful for potential refinancing opportunities. This is particularly important if you plan to stay in your home for an extended period. Taking advantage of lower interest rates can result in significant long-term savings.
If you’re one of the lucky ones with an interest rate below 4%, monitoring interest rates may still be important. If you’re considering using your home equity for a home improvement project or another venture, pulling out a HELOC may be the answer to getting some projects off the list this year.
Review Your Salary
If your salary hasn’t changed since 2020, it might be time to consider having a conversation with your supervisor.
I think most of us feel uncomfortable about approaching our supervisor to talk about money. (I am one of those people.)
However, in cases where your company doesn’t provide regular annual salary increases, and you’re not next in line for a promotion, asking for a raise may be the only avenue to getting the raise you believe you deserve.
I can’t think of anyone else who will stand in line and vouch for you better than you can.
Especially in an environment with rising inflation and increased living costs, ensuring your income keeps pace is super important. Otherwise, considering inflation, you may be making less than you were three years ago.
Balance Work and Reward
We all understand the importance of your goals, but an excessive focus on work without leisure can lead to burnout.
Consider adding saving for a vacation to your short-term goals if you haven’t done so already. Not only does it offer a well-deserved break, but it also brings a healthy balance to your financial journey, allowing you to enjoy the fruits of your labor.
You shouldn’t have to wait until you’re 65 to enjoy life’s pleasures. Take some time, even for a weekend getaway, to replenish your energy to keep moving forward.
Nurture Personal Growth
Similar to finding a balance between work and reward, make sure to allocate time for investing in your personal growth. While finances are essential, ensuring you don’t lose sight of yourself, your passions, and the things you love is crucial.
So, consider purchasing that online course or attending that workshop you’ve been eyeing. Even if it isn’t related to personal finance.
Whether it’s learning how to crochet or mastering the art of making sourdough bread, investing in yourself translates to both personal and professional growth. Remember, good physical and mental health far outweigh any monetary returns.
Create Additional Income
Good physical and mental health does not only contribute to your overall well-being. It can also spark new ideas that fix the financial obstacles you may be facing.
Bringing a passion project to life may lead to unexpected additional income. This can create a positive ripple effect in your financial journey.
If there are ideas you’ve been contemplating, don’t hesitate any longer. Take this moment to explore a side hustle or pursue a passion that aligns with your interests.
Final Thoughts on Short Term Financial Goals
As we approach the new year, it’s time to shift our focus from just fitness goals to our financial well-being. Much like preparing for the gym, financial success requires effort and planning. This checklist provides a mix of ideas to kickstart your 2024.
Remember, finding the perfect balance is key, and the SMART formula serves as your science-y guide to achieving these goals. Let’s make 2024 OUR year, filled with thoughtful decisions and life-changing financial milestones!
FAQs
Should we maintain separate portfolios for different financial goals?
Maintaining separate portfolios for different financial goals is a smart strategy. It allows you to tailor your investments to the specific time horizon and risk tolerance of each goal. For example, a short-term goal like saving for a vacation might be better suited to low-risk investments. A long-term goal like retirement can benefit from a more aggressive approach. This way, you can optimize your investment strategy for each goal and work towards achieving it more effectively.
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