Money-Saving Strategies for Short and Long Term Goals
Sticking to a strict budget so you can begin to save money for your financial goals is hard, especially if you have to completely change the way you’re spending to stick to the budget. You may find you just need to skip your fancy coffee in the morning or you may need to cancel your robust cable TV package. These compromises allow you to free up money in your budget so you can focus on building up your savings account and ultimately reach your short-term or long-term financial goals.
However, if you research some of the best money-saving tips and strategies, you’ll find there are other factors that go into achieving your financial goals. It’s just as important to think about where your savings are sitting while you’re building it as it is to actually save that money. Reviewing money-saving tips, examples, and strategies can help you create a solid plan to achieve your short- and long-term money goals.
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Short-Term vs. Long-Term Savings Goals
Before you review tips for saving money, it’s important to be able to identify your short-term and long-term financial goals. Knowing the difference between these two types of goals will help you to develop more realistic strategies to achieve them. Clearly defining these goals can also be useful when you’re trying to implement small changes.
Your short-term goals should include goals that are easier and faster to achieve, while your long-term goals are those you won’t be able to achieve in the near future. Short-term goals should also be stepping-stones to your long-term goals and when you achieve these short-term goals, it can help keep you motivated to stay on track toward your long-term financial goals.
The best way to achieve any financial goal, either short- or long-term, is to have specific savings goals in mind. By consistently reaching your savings goals, you’ll continue making your way toward achieving these bigger goals. There isn’t one savings strategy that you can use for every goal you want to achieve. You’ll find you need to develop different strategies and follow specific money-saving tips depending on whether you’re attempting to reach a short-term or a long-term financial goal.
Examples of Short Term Savings Goals
Your short-term savings goals should be ones that you’re able to work towards right now and potentially achieve in the near future. These small savings goals are what can help you to eventually achieve the bigger goals you have in mind. You may set short-term savings goals that include:
- Saving $20 every week.
- Building a $5,000 emergency fund.
- Paying off your credit card debt.
- Completing a minor home repair, such as purchasing a new water heater.
- Saving for a family vacation for the summer.
Examples of Long-Term Savings Goals
On the other hand, long-term savings goals are those you know you won’t be able to achieve right away. These goals take time to complete, but it’s important to remember that every money related action you make now can help or hurt your progress toward these goals. Again, your short-term goals should be the steps you take toward these long-term goals. Your long-term financial goals will be unique to you, but may include:
- Buying a house.
- Retiring early when you turn 55.
- Paying off your student loan debt.
- Saving money for your child’s college fund.
- Buying a new car or boat.
Achieving a Short-Term Money Savings Plan
Once you’ve set your short-term savings goals, you’ll need to use money-saving tips and strategies to achieve them. The steps you follow to reach these goals will be dependent on your income and ability to save each month. No matter what your goal is, you’ll need to earn more money than you spend to start saving and eventually reach these short-term goals.
If you’re not earning enough income to save, consider taking on a side job, selling things you don’t need, or starting a lawn or dog-walking service in your neighborhood. Analyze your budget and attempt to cut out monthly expenses you don’t truly need, such as movie streaming services.
Setting small savings goals, such as contributing $500 each month to your savings account, can help you stay on track with your short-term money savings plan. Consider participating in your own money-saving challenges to keep yourself motivated to achieve these short-term goals.
Achieving a Long Term Money Savings Plan
To achieve long-term financial goals, you’ll need to implement the best money-saving tips and advice to make permanent lifestyle changes so you can build healthy financial habits. Long-term goals can only be achieved when you create fundamental habits that include consistently focusing on meeting your monthly savings goals.
You can implement any number of savings strategies that work for you and your lifestyle. For example, you can use the 80-20 savings rule, where 80% of your income goes toward bills and other necessary expenses, while the other 20% of your income goes toward your savings account and other financial vehicles that will help you achieve your long-term financial goals. Once you begin using a money-saving strategy such as the 80-20 rule and make the necessary permanent lifestyle adjustments, you’ll get used to implementing the rule each month. Your savings will begin to add up and you’ll be on the right track to achieving your long-term financial goals.
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This post was updated November 21, 2019. It was originally published November 21, 2019.