Setting financial goals doesn’t sound like the most exciting thing… it’s peak adulting, for sure! But it can reduce your stress and also help you afford to do more fun things. Starting with short-term goals is a great place to start. This will help you build a solid foundation for things you want to do in the longer term, like buying a home, saving for retirement, or paying off debt, as well as having enough spare money to do day-to-day things you enjoy. Here are some tips for setting your short-term financial goals.

The importance of short-term financial goals

1. Focus and motivation

Short-term goals provide clarity and motivation. They help you stay focused on specific objectives that you can reach relatively quickly, and that can boost your confidence and motivation to tackle bigger financial goals.

2. Financial discipline

Working toward short-term goals can help you to become more disciplined in your day-to-day financial habits. It encourages regular saving, budgeting, and responsible spending.

3. Financial security

Achieving short-term goals can boost your financial security. Whether it’s building an emergency fund or paying off high-interest debt, these goals provide a safety net and reduce financial stress.

4. Stepping stones

Short-term goals serve as stepping stones toward bigger financial milestones. When you accomplish them, you create a strong financial foundation that can support your long-term aspirations.

How to set short-term financial goals

1. Identify your priorities

Start by thinking about your financial priorities. What are the most pressing financial needs or wants that you have in the next one to three years? This could be saving for a vacation, paying off credit card debt, or building an emergency fund.

2. Make your goals SMART

SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. For example, a goal like “Save $3,000 for a summer vacation in 12 months” is SMART, as it’s specific, quantifiable, realistic, and has a clear deadline—which makes it easier to achieve.

3. Break down large goals

If you have a big short-term goal, break it down into smaller, more manageable milestones. For instance, if you want to save $6,000 for a down payment on a car in the next two years, set a goal of saving $3,000 each year.

4. Consider your current financial situation

Be realistic about what you can achieve based on your current income and expenses. Setting overly ambitious goals is discouraging if you can’t reach them.

Examples of short-term financial goals

1. Emergency fund

Establish an emergency fund to cover unexpected expenses like medical bills or car repairs. Aim to save three to six months’ worth of living expenses.

2. Pay off high-interest debt

High-interest debts, like credit card balances, cost you the most, so it’s a good idea to focus on those first. Set a specific goal to eliminate a certain amount of debt within a defined timeframe.

3. Build a vacation fund

It’s important to plan fun and rewarding experiences throughout your financial journey. One great way to do this is to save money for a dream vacation or a special trip. Set a savings target and plan for the trip’s estimated cost.

4. Start an investment portfolio

Start investing in stocks or other types of investments. Set a goal to invest a particular amount of money within a year, and plan to keep it invested for a particular timeframe.

5. Home renovation

If you’re planning a home improvement project, set a budget and savings goal for it. That way, you’ll have a realistic idea of how much it will cost, and you’ll have money ready to spend on it!

Tips for achieving short-term financial goals

1. Create a budget

Making a budget helps you allocate what you earn toward your goals effectively. It also lets you identify areas where you can reduce spending to boost your savings.

2. Automate your savings

Set up automatic transfers from your checking account to your savings account. That way you consistently save a portion of your income without the temptation to spend it.

3. Monitor your progress

Regularly check your progress toward your short-term financial goals. This keeps you accountable and motivated to stay on track. It’s also helpful to keep track of which categories your money is going toward each month, to make sure you’re only spending what you need to. The Brigit app’s Finance Helper is a great tool for this.

4. Adjust as necessary

Life can be unpredictable, and sometimes things change. If your circumstances change, it’s okay to adjust your goals accordingly. Whether you need to increase or decrease your savings target, flexibility is key.

5. Seek professional advice

If your financial goals are more complex, like investing or tax planning, think about working with a financial advisor. They can provide expert guidance customized to what you want to achieve.

6. Celebrate milestones

When you achieve a short-term financial goal, celebrate your success. Acknowledging your accomplishments can reinforce good financial habits and motivate you to tackle the next goal.