The Importance of Short-Term Financial Goals

Dream big, Shoot for the stars, yada-yada-yada—the New Year’s Resolution Effect (NYRE) is in full swing, and with that comes over-the-top goals that sometimes leave us resolutioners (yes, I think I just made that word up) feeling more like losers than the winners we dreamt of becoming as the ball was dropping from the sky. If your thought process during the final countdown of 2013 sounded something like this…

“10…I am going to pay of ALL my debt this year…9…I’m going to do it, everyone watch me…87…Okay, I’m paying off at least half of my debt this year 6 5…I’m not sure that is even possible …43…Okay, I’m going to pay off a little bit extra…2…Wait, what was that HUGE ambitious goal I originally had in mind…1…Oh, screw it, I don’t even know how to start to solve my gigantic debt problem…Plus it’s not really a problem. Everyone has debt….HAPPY NEW YEAR!!”

You are not alone.

I’m not writing this post to bash long-term financial goals. I am writing this post to promote the necessity of the short-term financial goals that make achieving awesome long-term financial goals possible. Short-term financial goals keep you motivated to push forward by providing you with reasons to celebrate mini-victories while on your journey towards achieving a much bigger goal. Short-term financial goals also help you create the road map that will lead you to that ultimate and final financial goal that is very hard to see at the beginning of your journey. The-long term financial goal is the destination. The short-term financial goals are the steps you take to get there.



1. Short-Term Financial Goals are ACHIEVABLE – One major difference between a short-term financial goal and a long-term financial goal is how far away you are from achieving it. Short-time financial goals should be within your mental reach. Let’s pretend for a moment that your long-term financial goal is one (metaphorical) foot away from you. If you need frequent check-ins to stay on track then it’s a good idea to have a short-term financial goal set up for every inch (that’s 12 short-term financial goals before you reach that long-term goal that is one foot away from you) along the way. If you are the type of person who enjoys traveling a little bit further to reach a bigger reward, then your mental reach might expand to every 2 or 3 inches (that’s 4-6 short-term financial goals to act as check-ins on your way to reaching your long term, currently hard-to-picture, financial goal). There is no right and no wrong distance. The best way to set a short-term financial goal that is achievable is to find your own personal balance between getting yourself moving and avoiding the tragedy of burning your hard-working arse out before you finish the race.

2. Short-Term Financial Goals are your GUIDE—Make sure that you set your short-term financial goals, not only to keep you chugging along, but also to keep you going in the right direction. I like to compare financial lifestyle goals to healthy lifestyle goals. You can’t change EVERYTHING at once…you would be setting yourself up for certain failure. Instead make small changes that—when added together, have a big impact on your life.  Try to focus on one positive short-term financial change each week or month, and when its time frame has passed, direct your attention to a new positive short-term financial change. This is an excellent and underwhelming way to turn your short-term financial goals into long-term financially fit habits.

3. Short-Term Financial Goals will PUMP YOU UP—If you only have one long-term financial goal, there is a good chance you will spend months—or even years—being reminded that you haven’t quite accomplished what you set out to do yet. Well…that’s no fun, and I’ve found that “fun stuff” makes life a whole lot better. Reaching short-term financial goals that keep on the path to your final long-term fabulous financial destination is ABSOLUTELY a reason to celebrate, congratulate yourself, and get motivated to keep going. You might even be surprised to learn that the happy dance you do (when you are home alone, with the blinds down of course) and the feelings of accomplishment and pride you experience upon crossing those short-term financial goals off your to-do list are significantly more motivating than any reward you could buy with all that money you’ve been saving 😉 Funny the way that works out, isn’t it?

In a perfect world, we could all be this cute as we celebrate reaching our goals..this little guy is on to something.

In a perfect world, we could all be this cute as we celebrate reaching our goals..this little guy is on to something.

What long-term financial goals have you set for yourself and how do short-term financial goals help you go the distance?

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