Short-Term Financial Goals That Could Improve Your Financial Life This Year

It’s never too late to take action to improve your financial future. Goal-setting is one strategy that can help you stay on track as you build new, lasting habits in your everyday life. It’s great to set big goals, like buying a home or going on a dream vacation. 

Sometimes, though, a goal that’s too big or too far out may feel intimidating. That’s why it’s also good to create some short-term financial goals that you can reach this year. 

By working toward small, manageable goals, you can build toward those bigger goals and set yourself up for financial success. Here are a few short-term financial goals that could improve your financial life this year. 

Save Up an Emergency Fund 

A great short-term financial goal to work toward is building an emergency fund. An emergency fund can make surprise bills, like a car repair, easier to handle. It could also give you more confidence, increase your financial security, and enable you to avoid taking on additional debt. 

It’s okay to start small. You might set a savings goal of $500 or even $250 this year. You may even break it down more: Aim to save up $5 or $10 each week. You may be surprised how quickly it can add up.

Plus, tackling a manageable savings goal like this can help you stay motivated. Once you reach this milestone, you can increase your goal and continue making contributions to your savings account.

Make a Budget 

Building a budget can help significantly improve your financial life this year. Don’t let the word budget scare you. Budgets aren't all about getting rid of anything good from your life. It's about getting the big picture of your finances and making informed spending decisions.

To make a budget, take a look at your monthly income and draft a list of your monthly bills and expenses. Be sure to include fixed expenses, such as car insurance, rent, and student loan payments. You'll also want to estimate your variable expenses, which can change, like groceries, gas, and dining out.

Next, set monthly spending limits for different purchase categories. For variable expenses, it can be beneficial to set spending limits for yourself to avoid racking up debt.

Remember that budgets aren't set in stone. Once you establish a budget and get used to following it, you'll likely find ways to adjust your spending and saving habits for better balance. You may even be able to allocate extra money to financial goals, such as emergency savings or debt payoff, to help you reach them sooner.

Reduce Your Spending 

Setting up your budget should show you where the money is going. You could be spending more than you realize. 

As you decide which short-term financial goals to prioritize, consider goals around reducing your spending. This could be anything that cuts your overall costs. Perhaps you set small goals like a no-spend week (or month), where you only spend money on essentials. Or set a goal to cancel all but one streaming service and rotate them every other month for fresh content.

You could also try negotiating the cost of some of your bills, like your mobile or cable bill. Switching to a cheaper plan or asking to have a promotion applied to your account could cut your costs. 

Reducing your spending even a small amount—like $50 to $100 a month—could make a big difference. Once you change your spending habits, you can reallocate that money to other needs. 

Pay Down Debt

Another short-term financial goal that you may want to work towards is reducing your debt. High-interest debt in particular could be really holding back your financial flexibility. 

You could set an affordable monthly amount to put toward debt repayment. For example, you might commit to putting an extra $100 toward debt repayment each month. Be specific when deciding how much debt you want to eliminate and choose attainable goals. 

Making extra debt repayments could help you get rid of debt faster. This strategy could also offer interest savings. Every extra dollar you allocate to your debt makes a difference and could help you get closer to becoming debt-free. 

On the other hand, if you're already struggling just to make minimum payments, your goal might be to find credit card debt relief. When financial hardship makes your debt unaffordable, settling your debts for less than you owe could be a good goal so you can get rid of your debt and move forward.

Consistency Is Key 

Bravo for prioritizing your financial health. Taking small, consistent steps to improve your finances can make a big difference in improving your financial wellness. Setting small, manageable goals can help you stay motivated as you create new lifelong habits.

​If you’re struggling to manage your debt, help is available. You may want to consider hiring a professional debt settlement company, such as Freedom Debt Relief. You can set up a free consultation with a debt expert to discuss your options, which may include debt relief.