A car in the driveway, a house owned outright, and a college degree: the classic hallmarks of the American dream. All of these are long term financial goals, requiring saving strategies, payment plans, and some serious discipline. But what about your short term financial goals? We can’t just focus on the pie-in-the-sky dreams without thinking about bettering ourselves in the meantime.
Some short term financial goals might include paying down credit card debt or freeing yourself from the yolk of student loans. If you’re looking for a smart money lifestyle shift, consider tracking your spending to start saving more.
Focusing on smart (and smaller) money goals can help motivate you for the bigger ticket items like buying a house or retiring early. Developing smart money habits when you’re young is easier when you have incentives throughout the process. Here’s how to tackle short term financial goals… and how they can motivate you to accomplish the bigger ones as well.
4 Short Term Financial Goals You Should Be Working Towards
1. Paying down Credit Card Debt
With the average American household carrying $6,375 in credit card debt , it’s no small wonder this idea is at the top of our list.
Typically, credit card debt involves punishing interest rates and hefty late fees, to say nothing of the affect carrying a monthly balance can have on your credit score. Getting out from under credit card debt can be a huge anxiety reliever.
If it doesn’t seem feasible to you, consider taking out a small personal loan to repay the credit card debt. Small personal loans usually offer lower interest rates than credit cards.
Unlike most credit cards, there are no extra fees or fine print—and personal loans come with a fixed interest rate. With SoFi, you can take out a consolidate credit card debt for $5,000 to $100,000. And there’s an added bonus of using personal loans to pay down plastic debt. You can raise your credit score by an average of 31 points.
2. Paying off Your Student Loans
While this might seem like a big-ticket item, it doesn’t mean you should ignore it. Many Americans are eligible for student loan forgiveness or consolidation, and they don’t even know it. College debt is punishing enough without paying extra.
If you are paying down your student loans: firstly, you’re on the right track to a secure financial future. But it is worth checking a student loan savings calculator to see if refinancing to a lower interest rate might help you. Check your balances and interest rates across both federal and private loans. Then plug them into this calculator to learn how refinancing can help.
Not all refinancing options are created equal. There are scores of bad actors on the internet who might promise to get rid of all your debt but will only damage your credit score. They prey on your debt anxiety. Make sure you’re refinancing with a reputable lender.
Another benefit of consolidating loans with a lender like SoFi is that you can change the payment schedule. If you need to contribute less per month over a longer period of time or if you want to make higher monthly payments to pay your debt down as fast as possible, you can decide what option works best for you.
3. Tracking Your Spending
As any money guru knows, tracking your spending is the best way to get on top of both short term financial goals and long term financial goals. It might sound very boring, but using a tool like SoFi’s monthly budget spreadsheet can help to keep you from frittering away your hard-earned cash.
Seeing where your moolah goes can also help to set a realistic budget in the future. If you know where your money is being spent, it’s easier to prioritize what matters to you.
Budgeting doesn’t have to be a bad word. For example, if you love live performances but don’t ever end up watching TV, consider cutting the cord and use that money to subscribe to a local theatre for discount tickets. Or if you enjoy eating out but don’t mind making your own coffee, consider skipping the daily latte and treating yourself to a monthly meal at a fancy restaurant. It’s all about balance, people.
Tracking your spending habits means more financial freedom in the future, as well as security now. You can focus on the important goals–like buying a house or retiring early.
If you’d prefer an app to manage all of your finances, consider using SoFi Money. A mobile-first money management account that combines the benefits of a checking and savings account by allowing you to pay bills, deposit money and use ATM machines, for free.
4. Save More Money
Once you track your spending, you can begin to start saving more. It’s hard to know how to build a strong financial future if you don’t evaluate your current status. Are you splurging too much at your local bar? Or is your wardrobe putting your finances in arrears?
Once you get a clear picture of your finances, it is easier to start saving more, which means working toward long term financial goals like retirement. People with savings goals are nearly twice as likely to spend less than they make and save the difference according to an America Saves Week survey.
If you’ve mastered budgeting and are stashing away some cash every month, first off, congratulations. This is the first step to achieving financial independence.
Now, it’s time to consider using an investment platform like SoFi Wealth Management to help grow your nest egg. With 0% in management fees and $0 for unlimited personal finance advice, it’s a no brainer.
The team manages your passive assets and helps map out a plan to your milestones whether it be early retirement or paying off your mortgage. We automatically rebalance your investments and reduce the risk of your portfolio by investing in thousands of assets. And our financial planners offer personalized tips based on your own situation and future financial goals.
SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.
Neither SoFi nor its affiliates is a bank.
SoFi MoneyTM is offered through SoFi Securities, LLC, member FINRA / SIPC . Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.