Short-Term Savings Goals That Make A Lasting Impact

Have you ever looked around at your life and just really wish things were different? Maybe you hate where you live. Maybe you are driving a car that is on its last leg. Or maybe you are currently working 60 hour weeks just to make ends meet and your fridge is still bare.

It is not unusual or even wrong to want better. However, you will not get there if you do not work toward your goals. As much as I wish I could just wish for a new home and one appears, that is probably not going to happen. If I want a new home, I have to put in the work to get it.

If you are ready to change your life for the better and have a brighter financial future, you need to set some goals. Long term goals are the big, very exciting ones, but they alone will not get us where we want to go. Instead, we have to set short term financial goals that we can accomplish more quickly.

Setting SMART Goals

When you set your short-term savings goals, you need to make them SMART financial goals. You have probably heard of SMART goals before. They are popular because they are effective. SMART stands for Specific Measurable, Achievable, Realistic, and Time-based.

To set SMART goals, you cannot just say, “I want to fix my finances.” It is way too vague. With this goal, you are not stating how you are going to do it or even how you will know when you reach it. It is not an effective goal. Here are some examples of SMART goals:

  • I will save $1,500 by the end of the year by cutting out fast food four times each month.

  • I will cut my monthly expenses by $100 by cutting my cable.

  • I will open an IRA in the next 30 days.

SMART financial goals

As we go through this guide for short-term savings goals, do not just choose vague goals. Be specific in what you want, add in as much of the when, where, and how as possible, and set a deadline. Also, the “R” stands for ‘relevant’. This one should not be overlooked.

Your goals should be relevant to you. Do not set goals just because they are what you “should” be doing. It is really hard to get motivated and stay committed to goals that you really do not care about. However, when a goal really means something to you, there is an emotion attached to it, and emotions can be an incredible driving force.

What Exactly Are Short-Term Savings Goals?

Before we move on, let’s take a moment to define what exactly we mean by short term savings goals.

How Can Short-Term Savings Goals Change Your Life?

Short-term savings goals are like building blocks for your financial future. If you want to build a giant blockhouse, it starts with one block. You then add another and another and another until you have built the house.

If you want to make giant financial changes, you have to start with short-term savings goals. There are many small steps you can take to make a lasting impact on your finances, but we put together a list to get you started. If you work down this list, you will see changes in no time. Then, you can start adding your own ideas for even greater changes.

3 Years Deadline

Short term goals are typically goals that you can reach within a three year period. They require smaller steps than your long term goals.

Baby Steps

You should be sure that your short term goals are moving you toward your long term goals. And even though they are called short term goals, you should still break them down into bite-sized, baby steps and then set a date to get them done.


For instance, if you are wanting to hire a financial advisor, you need to first figure out what financial advisors are available, research their results and reviews, and call to make an appointment. These three steps should be treated as separate things even though they are for the same goal.

Serious Planning

After you have broken them down into really small steps, schedule each of them in your planner. Treat them like a very important appointment so that you actually accomplish your goals.

1.Decide What You Want Out of Life

Okay, so to decide what building blocks you need, you have to determine what you want your house to look like, right? There are plenty of short term financial goals here that can help you reach whatever dream you are shooting for. However, the specific goals you choose or work the hardest toward should depend on your long term goals. What do you want your life to look like in 10, 15, even 40 years? Write that down so you can build your blueprint.

2. Start Budgeting or Refresh Your Current One to Meet Your Goals

Along with deciding what you want in life, budgeting to get there is equally important. Your budget is the blueprint I mentioned above. It tells you what needs to go where and other pertinent information. If you do not have a budget, it is time to start one. If you do have one, revisit it now so you can be sure it is set to help you reach your goals.

3. Open a Traditional Savings Account

You need a safe place to put the money that you save. There are various options here, but it is a good idea to have a good old fashioned savings account. They are safe as they are FDIC insured, and they are easy to access in case of emergency. Check around for the savings account with the best interest rate so that your money can grow a little while it is tucked away.

4. Pick Some Other Accounts to Park Your Savings

While you definitely do need a savings account, you should save some of your money in other accounts that can earn you more. CDs are a good place to park some cash for a while and you will be more motivated to leave your money alone since you could lose some of it if you cash out early. Mutual funds are another great option.

The bottom line is that you should save your money in several different places. Take some time to pick the types of accounts you like and make plans to open them. Then, pick an amount to put in each account on a regular basis. Starting accounts such as these are a great start to a better financial future.

5. Use Cash Instead of Cards

Challenge yourself to use cash only as much as possible. Put the credit cards and debit cards away. They make it too easy to overspend. Instead, set your bills on auto-pay. On payday, get your money out of the bank and pay for everything else in cash. We are psychologically more attached to paper money than we are to the theoretical money in our banks. Due to this, we do not part with cash as easily. Plus, seeing your money dwindle down can help you make wiser decisions.

6. Start Collecting Your Loose Change

If you do not already, start collecting your change. You will find you have a lot when you start using cash. Find a jar, butter bowl, or something else to collect your loose change in. After a set period of time, go cash it in and add the money to one of your accounts.

7. Reduce Your Monthly Expenses

Reducing your monthly expenses is an excellent goal for everyone. Don’t just decide to reduce them, though. Set a specific goal, such as cutting them by 15 percent. Write down all of the bills you pay each month and start at the top of the list. Negotiate rates, cut out services, or switch providers- whatever you need to do to cut each expense down.

After you have cut them down, put the money you saved into one of your accounts. Think about it: Let’s say you are able to cut your expenses by $100 a month (totally doable) and you put that money away. At the end of the year, you have saved an additional $1200. That is really not a bad amount and you will not be missing it since you are already accustomed to that money going out.

8. Build a Rainy Day Fund

An emergency fund really should be a top priority for everyone. In life, it is not a question of if a storm will hit but when. You have to be prepared for the curve balls that come your way, and a rainy day fund can help you do just that.

While an emergency fund should ideally have at least three to six months of living expenses in it, you do not have to start with that amount just yet. You should aim, though, to have at least $1000 in there- which you can easily do if you put the $100 a month you saved on expenses into your emergency fund.

9. Upgrade Appliances and Home

You may find this to be a strange thing on a savings goal list, but there is a purpose. Old appliances and electronics can use a whole lot of power, running your bills up. Investing in new, energy-saving appliances and electronics can have many long term benefits. While you are at it, you can consider making other home improvements that can save you money for years to come.

10. Cut Spending

If you can dig into your spending and cut down, you can add to your savings quickly. Think about the things you buy every week or every month. What can you cut back on or even cut out completely? Everyone’s answers will differ, of course, but here are some goals you might set to cut back on your spending:

  • Start taking your lunch to work instead of buying lunch.

  • Drink homemade coffee instead of buying it every day.

  • Start making a meal plan and a grocery list each week.

  • Actually take that shopping list to the store and use it.

  • Also, start cooking those meals instead of eating out. You might set a specific number of days you can eat out each month.

  • Stop buying candy bars at the gas station. Instead, buy a pack at the grocery store and keep them in your car for when temptation hits.

  • Stop buying clothing that is unnecessary for a set amount of time.

Are there any other ways you can think to cut back on your spending?

11. Automate

One of the best ways to make sure your bills get paid and your money is saved is to set it all on automatic. The convenience of the digital world allows us to set up systems. You can tell your bank to automatically transfer a set amount to your savings account each week or month. You can tell your utility company website to go ahead and charge a specific card for your bill each month. Retirement accounts and other investment accounts are the same way.

After you have created a budget that works, go ahead and automate everything that you can. In addition to the convenience of not having to do it all manually, automating things can be beneficial in other ways. If your bills are automatically getting paid when they are due, you avoid late fees. Also, when your saving is automatic, it minimizes the chance of you choosing to spend that money instead of saving it.

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12. Track Your Expenses

If you really want to make lasting changes, you need to take an honest look at where things might be going wrong. Start tracking all of the money you spend. It is easy to keep up with what you spend on bills. However, your spending takes some more work.

Figure out a way to keep up with all of your purchases. This might be an app, a spreadsheet, or a sheet of paper. It really does not matter where you list your expenses as long as you can look at them when it is time. It usually takes a few months to get a full view of your spending habits, but you can start identifying patterns almost immediately.

When you see where your money is actually going, you might be surprised. It is not unusual for people to learn that they spend more on eating out than they do on some of their bills once they start keeping track. Get into the habit of tracking your expenses now. Periodically look at those expenses and determine where you can save.

13. Open a Retirement Account

We all want to retire someday, right? We cannot do that if we do not have money set aside to take care of us at that time. Make one of your short term goals be to open a retirement account in the immediate future. Decide on an amount that you want to put in and how often you want to do so, and automate this as well.

14. Open College Funds

If you have kids, are planning to have kids, or have any other kids you want to help, consider opening up college funds. You might want to make an appointment with a financial advisor who can help you figure out the best way to do this. 529’s are a popular choice, but they are not the only way to save for college. Talking to an expert can help you find better options.

Conclusion

Creating short term financial goals is a very important step in the right direction. By choosing and setting SMART and effective short term goals, you can see yourself making progress toward the big ones. Take some time to sit down and really consider what you want your future to be like. Then, invest the time and energy into figuring out what short term savings goals you need to set to get there. Your future is worth the effort.