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Wherever you’re currently in your financial life, your goal must be to avoid the same struggle in your future.
That’s great thinking, by the way!
However, only thinking about a secure future isn’t going to give one.
Yes, you must budget, practice savings, and create short-term or long-term money goals for your 20s and even 50s.
The key is to really plan everything money-wise to achieve your financial dreams.
Financial Security Of Your Future
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The definition of financial security might vary from person to person.
- For some, having their own house is the security they need,
- For others, a luxury car, a bank account full of money, and an investment breakthrough are all they need to call their future secure.
So, you have to put more effort into your definition of financial security.
Moreover, with all the economic uncertainty and sudden outbreaks, controlling your financial future has become even more evident.
How to do that the right way? By creating short & long-term financial goals. Let’s read that in detail below.
5 Short-Term Goals
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As the name suggests, all the goals you plan to achieve within a short time are deemed short-term goals.
- You want to pay the lease of your new apartment,
- You need to manage installments for your new car,
- You want to save enough for your well-deserved vacation,
- Or, you have eyes on that sofa set.
Whatever needs immediate financial planning to fulfill is probably a short-term goal.
Here are examples of some smart short-term goals you can try:
1. 6-Month Worth Emergency Fund
An emergency fund is an account that can manage your financial payments in any unexpected monetary situation.
- It could be a loss of job,
- Failed investment,
- An accident,
- Or any natural mishap.
Yes, life is unpredictable, so at least you should plan what you can do in such unannounced emergencies.
So, creating a 6-month worth of emergency fund is the prime example of a short-term goal.
2. Paying Off Credit Debt
Debt is something you shouldn’t prolong!
If ignored for a long time, it can accumulate and pile up in such impossible and too much to handle payments that you’ll regret borrowing money in the first place.
Plan your debt payments, talk to your secured credit card provider, and devise strategies to pay off the debt in 6 to a year.
You need the right planning to achieve your goals!
Bonus: 10 Debt Relief Credit Tips!
3. Achieve A Money Milestone
Your money milestone should be something that can motivate you to do more. In fact, it can be anything related to your earnings, savings, and even retirement.
- For instance, you can manifest a credit limit increase,
- Specific money range for your earnings,
- A set goal for your retirement fund, etc.
These must be achieved within a year to be deemed short-term goals.
You don’t want to set your earnings goal to $1.5M a year; if you fail to do that, you’ll only be disheartened.
We don’t want that!
4. Increase Your Income
An increased income can help you achieve all the money milestones!
Only if it was that easy!
Of course, you know it already, you need money to live your dream life. But how to do that? Here are some tips:
- Start earning passive income,
- Utilize your skills to earn money,
- Invest in freelancing and part-time jobs, etc.
Of course, you can also start investing your money, but that’s for a long-term goal as it can take time to bear fruit from an investment.
5. Save Money On Every Budget
If you’re looking for a short-term goal that’s good for the long-term, this is it!
Saving something on every monthly budget is a tip that can motivate you to save even more.
Like, the feeling you get when you receive an extra little bonus or when you get a surprise freebie.
What are you waiting for? Decide today that you’ll save at least $100 from your budget.
Note: Remind you these bucks shouldn’t be from the retirement or other savings account.
5 Long-Term Goals
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As the name suggests, these financial objectives will take longer to achieve.
You might need at least 5 or more years to accomplish your goals.
However, you need several short-term goals to ensure that you actually reach your long-term goals.
Here’s a list of smart long-term goals:
1. Clearing Your Mortgage Loan
Paying off your mortgage should be your top long-term goal.
Because if you haven’t cleared your house repayments before your retirement, things can take a toll on your mental health.
As you know, when you reach retirement age, your energy and stamina to earn money reduces.
So, you should focus on clearing your mortgage bills faster or at least 3 to 4 years prior to your retirement.
This takes us to our next point:
2. Be Financially Independent
Being financially independent is so important for so many reasons!
- It helps you take control of your financial future,
- It can assist you in achieving financial freedom,
- It can push you to reach the level of financial security you desire.
Yes, it’s that important!
You can say you are financially independent when you no longer depend on your 9 to 5 job or don’t have to survive paycheck to paycheck.
It’s basically when you become the boss of your own time and decide where to invest, what to save, how to live, and how to use your money.
3. Income For Your Prime Time
Are you in your 20s now? Great, you still have time to make things work in your favor!
People usually earn their best in their early 50s.
It’s the age when they have acquired the maximum skills or experience and know their worth.
So, when making a long-term money goal, think about where you want to see yourself financially at a certain age.
4. Plan Your Early Retirement
This may seem contradictory to some, but early retirement is a goal we all have deep inside.
Who wants to work all their life and still struggle with money even in their 60s? Absolutely, no one!
In fact, a special FIRE movement in Canada focuses on early retirement at any point of your file where you feel financially free.
5. Have Multiple Income Streams
Last but not least on our list is having multiple income streams.
Yes, it’s similar to passive income but not entirely. Your multiple income streams include anything that can help you earn money, whether directly involved or not.
In fact, when you’re in your late 30s or early 40s, it’s evident that you have multiple income resources to earn more to save more.
That’ll help you reach the dream of early retirement at the right time.
FAQs
1. What are short and long-term money goal examples?
Your short-term goals might include paying your remaining outstanding credit balance, setting up an emergency fund, or following your monthly budget.
In contrast, your long-term goals might range from paying off your mortgage, setting up a retirement fund, buying a new car, or being financially independent.
You can say short-term goals aim toward financial freedom (present), and long-term goals mainly focus on financial security (future).
2. How to achieve financial goals?
The process of reaching your money goals and securing your financial future is pretty straightforward:
- Write down your goals,
- Create a budget and stick to it,
- Increase your income and build wealth,
- Be financially independent,
- Think about early retirement,
- Set up a retirement fund,
- Pay off your student, mortgage, insurance loans, etc.
In simple words, you need commitment, planning, and patience to reach your dreams.
Final Thoughts
Financial security is the dream of so many Canadians, but only a few get to achieve it.
However, it’s not impossible!
If you have the dedication it takes to plan everything you need, it’s definitely achievable without much struggle.
Of course, you need several short-term and long-term goals to do that, but that’s the whole point.
Financial security is not a one-time thing.
Instead, you must work continuously for it! Yes, consistency is the key.
Want to know more? Read the complete guide.
