Short-Term Financial Goals: 4 Steps to Get What You Want

Ask someone about personal finance and they’ll usually talk about financial planning for long-term goals like retirement accounts and investment plans. We’ve got some advice about that stuff, too. But you know what really gets people fired up? Short-term financial goals. Set an achievable goal you can hit in a few short months and you’ll suddenly be filled with purpose.

Remember the excitement you felt as a kid saving your allowance for a video game or a mall trip? You’ll feel the same way reaching short term goals, all mostly grown-up.

Short-term financial goals are a great way to recognize the value of goal setting, make more focused financial decisions, and build some momentum toward changing your financial situation for the better.

So What Are Short-Term Financial Goals?

A short-term financial goal is a milestone that’s measurable (i.e. not a vague pledge to “save extra money”) and can be achieved within a 12-month time frame.

Short-term financial goals are like the appetizers of your financial journey. They’re the little bites that keep you satisfied and build excitement for your eventual entree (which, in this case, would be your longer-term financial goals).

In practical terms, short-term financial goals are the financial targets you set for yourself that you can achieve within a year or less. They could be anything from paying off a credit card balance to saving up for a new phone. The key is that they’re time-bound and achievable, which makes them a great way to build momentum and motivation for your larger financial aspirations.

Some examples of short-term financial goals include:

• Building an emergency fund: Setting aside a small amount of money each month until you have a few months’ worth of expenses saved up.
• Debt repayment: Get laser focused on paying off high-interest credit card balances, student loans, personal loans, or medical bills.
• Saving up for a vacation: Setting a savings goal for a fun trip or weekend getaway.
• Making a big purchase: Saving up for a new phone, laptop, or other big-ticket item that you’ve been eyeing.

Remember, short-term financial goals are all about setting yourself up for success with some quick(ish) wins. So, don’t be afraid to start small and celebrate every little win along the way.

What Should Your Short-Term Financial Goals Be?

At YNAB, we believe your money should reflect your priorities, which means everyone’s short-term financial goals will look different depending on their situation. But we won’t leave you hanging! Here are some goal examples from YNABers:

• Set aside enough emergency savings to cover essentials for a few months.
• Home renovation savings goal: Freshen up your bathroom; put new countertops in the kitchen; purchase new garage doors (which are strangely impactful on your home’s value).
• Aggressively pay off credit card debt. Advantages include less stress and an improved credit score. Start by tackling the card with the highest interest rate.
• Family vacation. See the world! Or Disney World, at least. Get out of your messy house!
• A car repair fund because walking on the highway is illegal.
• A downpayment for a new car, in case that car repair is more dramatic than you thought.
• Max out your Roth IRA for the year for that sweet sense of satisfaction.
• Hot dog finger gloves!

Get quirky as you set financial goals! Fire up your motivation with something fun and doable. (Okay, maybe the hot dog gloves aren’t for everyone, but this YNABer was really excited about them.)

Once you see a small example of what financial intentionality can bring, you’re hooked.

How to Achieve Short-Term Financial Goals

Step One: Identify What You Want

The first step of achieving your goals is obvious but often overlooked: know what you really want. It’s easier to stay focused when you can keep your eyes on the prize.

Our free downloadable budget planner is a helpful resource for organizing and exploring your finances, feelings, and priorities, so it’s a great place to start if you’re ready to do a deep dive. You can sign up for that and our short (no obligation, very non-spammy) Change Your Money Mindset email series below.

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If you want to keep this process quick and simple, sit down and brainstorm about what you would like to achieve in the next year.

Ask yourself questions like:

• What could I do to improve my personal life?
• What would I be excited to do or have this time next year?
• What looming expense needs to be checked off of life’s to-do list?
• What could bring me some peace of mind?

Consider starting with a small short-term goal as a confidence builder and save the rest of your list for later.

Step Two: Bring More Awareness to Spending

When it comes to finding extra money to fund your goals, you basically have two levers to pull: spend less or make more. Perhaps you get creative about lowering living expenses and cancel some streaming services or start skipping takeout. Maybe you get really wild and pick up a side hustle. This is where creating a monthly budget can come in handy.

YNAB is an app that helps you manage your money, but it’s based on Four Rules that simplify spending decisions—and you can benefit from the YNAB Method even if you don’t use the software:

The YNAB Method

Rule One: Give Every Dollar a Job

Ok, ?profound but obvious point here?: every dollar you spend on something you don’t really care about is a dollar you can’t spend on something you do care about. Assign a purpose to every single dollar you have—whether it’s to pay your groceries, mortgage, or future plane tickets—and get clear about where you want your money to go. This is known as zero-based budgeting (or cash envelope budgeting) and it will change your financial life.

Rule Two: Embrace Your True Expenses

Rule Two is how you future-proof yourself and your money. Break up large, non-monthly expenses into smaller, manageable chunks. When you can see that your upcoming car registration, life insurance premium, or even a general home repair goal is funded, you’ll sleep better knowing that you’re ready for whatever life throws at you.

Rule Three: Roll with the Punches

With YNAB you’re encouraged to make changes to your budget as priorities and circumstances change. This is especially important while you’re trying to reach a goal—it may be tempting to sprint to the finish line, but managing your money shouldn’t feel restrictive (or you won’t want to do it!). If you really want takeout, treat yourself. Just cover that spending from another expense category.

Rule Four: Age Your Money

Rule Four is about putting some distance between getting your paycheck and when you spend that money. It means giving yourself a buffer to absorb unexpected expenses so you’re not constantly putting out financial fires. If all goes well, you’ll have a pile of money waiting for bills to come instead of the other way around.

Following the Four Rules can help you get into the habit of making sure your spending aligns with your priorities, which is extremely helpful when it comes to meeting your financial goals.

Step Three: Set Targets

Remember how short-term financial goals should be measurable? Create a deadline to reach your goal. You can divide the total amount of money needed by the number of months until your deadline to figure out how much money to set aside each month, or you can just earmark extra money as you go.

With YNAB, you have the option to create targets for expenses or goals that tell you how much money to set aside, and by when. Set a target to put aside $800 a month for your emergency fund, or $150 a month for an upcoming weekend getaway, and visualize your progress as you go.

The beauty of zero-based budgeting is that you’re only budgeting the money you have, not projected income. So you can be confident knowing that your non-negotiables are covered as you put aside money for the short-term goals that light you up!

Step Four: Grow a Wish Farm

If you want to add some whimsy to your goals (and let’s face it, the world needs more whimsy), consider setting your financial goals up as a Wish Farm.

A wish list is a collection of goals, big and small, that get their own category group in your budget. It’s a big dose of motivation to see these aspirations written down in your budget (bonus points for emojis?). Think: this is what I want in my life!

Next, take a large, medium, and small item (whichever ones you want to happen first) and move them from the wish list to a separate, smaller group called the Wish Farm.

Now, “plant” your goals by setting a target or deadline. Then “water” them over time with funds. Lastly and jubilantly, “harvest” by buying that sweet thing once you have enough money!

If you don’t have a budget, you could still start a Wish Farm using a pen, paper, envelopes, and cash, but the emojis might be difficult to draw. And you might have to do some math. And go to the ATM.

Or you could do it the easy way and try YNAB for free for 34 days. There’s no credit card required, so you won’t get hit with a surprise payment at some point down the road. (Those are the worst, aren’t they?)

Regardless of how you meet your short-term financial goals, we’re just happy you’re thinking about meaningful ways to spend your money. And whether this journey to reach your short-term financial goals is a sprint or a marathon, we’d love to meet you at the finish line.

We’ll bring the confetti.

Ready to turn your short-term financial goals into reality? Try YNAB for free.