Knowing how to set goals is vital to your success. These tips will help you set small, attainable tasks while working towards your greater vision in financial wellness.
Setting short-term, midterm, and long-term financial goals is an essential step toward becoming financially secure.
If you aren’t working toward anything specific, you’re likely to spend more than you should. You’ll then come up short when you need money for unexpected bills. You might get stuck in a vicious cycle of credit card debt and feel like you never have enough cash to get properly insured, leaving you more vulnerable than you need to be to handle some of life’s significant risks.
But it’s not too late to start aligning your goals.
With the year finally coming to an end, you must take this time to plan for the next year and get aligned with your financial spending and goals. If you want to be more efficient in doing that, here are our tips for you!
Short-Term Financial Goals
Of course, start planning with your short-term goals — these are your more immediate expenses. Although timelines vary, these are the things you’ll spend money on generally within a few months or years.
Setting short-term financial goals can give you the confidence boost and foundational knowledge you need to achieve larger goals that will take more time. These first steps are relatively easy to achieve.
Here are some critical short-term financial goals that will start helping right away and get you on track to achieving longer-term goals.
Example of short term goals:
– Emergency fund.
– Payments toward rent, insurance, or student loans.
– Credit card debt payments.
– Personal goods.
– Minor repairs and home improvements.
Build an Emergency Fund
An emergency fund is a money you set aside specifically to pay for unexpected expenses.
To get started, $500 to $1,000 is a good goal. When you meet that goal, you’ll want to expand it so that your emergency fund can cover greater financial difficulties, such as unemployment.
With the pandemic and recent COVID19 surge, it’s crucial more than ever to consider building up your emergency fund. Let this year be a lesson to manage your finances.
Pay Off Credit Card Debt
Credit card debt can be one of the hardest to settle bills. Once you pay it off, you credit another two or more items on your shopping list.
However, when managing your short-term goals, it’s also essential that you put a strategy in paying off your credit card debts. With that, we recommend listing all your debts by interest rate from lowest to highest, then paying only the minimum on all but your highest-rate debt. Use any additional funds you have to make extra payments on your highest-rate card.
Always Establish a Budget Plan
“You can’t know where you are going until you know where you are right now. That means setting up a budget,”
Lauren Zangardi Haynes
Without a proper and solid budget plan, your finances and good-earned money may go up to waste. You might be shocked at how much money is slipping through the cracks each month.
Despite how much money you make, it still feels like you’re losing all of this money without a structured budgeting plan. Nothing goes wrong with good budgeting eh?
Mid-term Financial Goals
There is often overlap between the two categories that can make things fuzzy. Medium- or mid-term goals fall between short-term and long-term goals and tend to take a few years to achieve.
Your mid-term financial goals create a bridge between your short- and long-term financial goals. To start planning about your mid-term goals, here are some things you can do.
Examples of mid-term goals are:
– Buying a car.
– Saving for a down payment.
– Paying off debt.
Pay Off Loans
Especially educational loans.
Student or education loans are a significant drag on many people’s monthly budgets. Lowering or getting rid of those payments can free up cash that will make it easier to save for retirement and meet your other goals.
Consider Your Dreams
Whatever financial state you are in right now, remember that your dreams are valid. It just takes a little bit of building solid financial planning.
Your dreams are considered as your mid-term goals. Whether you want to invest in a new apartment downtown, go for your dream vacation, or buy your first car. Even preparing for college education for your children.
When you’ve determined one or more of these goals, start figuring out how much you need to save to reach them. Visualizing the type of future you want is the first step toward achieving it.
Get Life Insurance
Term life insurance is the least complicated and least expensive type of life insurance. When establishing a financial plan for your mid-term goals, make sure getting life insurance is one of them.
The first step towards achieving long-term goals is to ensure you are insured. Most term life insurance requires medical underwriting, and unless you are seriously ill, you can probably find at least one company that will offer you a policy.
At Harbor Insurance, we provide independent agents to help you find the best price on a policy. Make sure to book an appointment with us here.
Long Term Financial Goals
Long-term goals are usually your big-picture costs. These goals may take several years or even decades to reach. Your distant goals typically involve more money and regular attention than short-term or mid-term goals.
Essentially, long-term goals focus on retirement. The younger you’re planning for a retirement plan, the better. This is to ensure that you’re giving your family and children the life they deserve — even when you’re no longer able to provide for them.
How We Can Help
You’ll likely have a combination of short- and long-term goals to balance. Work your goals around your usual expenses, focusing on needs. Then you can decide how to allocate the rest of your money toward your wants and other savings goals.
The key here is to be consistent. And of course, you can use an expert’s help as well.
As an independent insurance agency, Harbor Insurance knows what you need to start your journey to financial planning. Whether you’re sorting out your load of expenses and bills or crafting an efficient plan — we make it happen.
Book an appointment with us today!