Our future is decided by the steps we take today. In order to reach our long-term vision in life, we must be able to break it down into actionable steps.
You wouldn’t start a project without outlining what the objective is first. Along with the project’s objective, you’d also want to understand the guiding principles of the actions you’re taking: the purpose of each action step and how you plan to reach the objective.
The same is true for our financial strategy.
If you feel like your money is just sitting in your bank account, or you find yourself spending it on things you don’t value, it may be time to set some short-term goals.
Why should I set short-term savings goals?
Short-term savings goals are easily measurable and actionable goals you can instantly start working toward. The more you achieve your short-term goals, the more motivated and ready you will be to reach your long-term goals.
The short-term savings goals can be small, like buying a wireless pair of headphones, or larger goals, like going on a backpacking trip or saving for a new car. The most important thing is that the short-term goal you set adds real value to your life. It fuels our enjoyment, adds entertainment, and helps us experience things we’ll never forget.
Why else might you want to set short-term savings goals? They have more financial benefits than you may think.
Short-term savings goals reveal our long-term vision
How many times have you been asked what your five year plan is? Most of us roll our eyes at the concept. There are so many unknowns in life that it’s perfectly okay to simply want financial flexibility.
Your vision doesn’t need to incorporate an exact plan, but it can help you set a series of intentions to guide your financial decisions.
When we sit down and focus on what our long-term vision looks like, our bigger goals can feel lofty and unattainable if we don’t have any actionable steps to work toward. This is where the short-term savings goals come in.
Short-term goals can fuel our long-term visions if we take the time to define what success looks like for us and what our values are, which leads us to our next point.
Short-term savings goals helps us utilize money more intentionally
If you looked at last month’s credit card statement, would you see purchases that don’t align with your values? Would you see purchases that fit someone else’s version of success but not your own?
You’re not alone. Many of us have been caught in the cycle of spending and saving for things we don’t actually care about. This can often cause us to reposition our short-term savings goals and push them to the bottom of our priority list.
Intentionality happens when all aspects of your overall financial strategy are working together toward a common goal. Let this mentality guide you as you start to brainstorm what short-term savings goals are the perfect fit.
Short-term savings goals increase our self-confidence in managing money
When you have a specific short-term goal, you have a set intention and action plan for how to reach that goal. With every automatic deposit, you get closer to achieving that goal and checking it off your list.
For each goal you check off your list, you get a confidence boost from knowing that you were able to invest, save, or spend in a way that aligns with your goals and values because of the choices you made.
We’ve seen many mimble users shift their money mindsets from “I’m afraid of numbers” or “Money is a major source of stress in my life”, to “Numbers aren’t scary” and “Money is a tool for freedom” through our goal-based savings process. By saving in the short term, you’ll develop a healthy mentality around money management that will sustain your long-term financial strategy.
3 realistic ways to start setting short-term savings goals
You’re convinced now that short-term goals are important, but how do you start setting them? How do you know which goals are most important to you and which to tackle first? We have a few simple, value-driven exercises to help you do just that.
Write down your short-term savings goals
The first step in achieving your goals is always to write them down. Without a written record, you won’t be able to remember or prioritize your goals. You can start by creating a master list of all the things you want to experience or purchase.
You can then organize your goals by category. These categories will become an umbrella to place your goals underneath. Category types could include travel, education, or anything else that feels relevant to you.
Add an approximate budget range to expect for each goal. This is usually when our eyes start to widen at how much each experience or item will cost, but stay with us. Next, you’ll want to create an ideal timeline for each. Some things on your list might be for years down the road while others are something you want to do within a year or two.
Set automatic deposits for your short-term savings goals
Now that you have an idea of what your short-term savings goals are, let’s start with the short-term goals that have the most fast approaching timelines and put them into mimble. We’ve made the process as easy as possible.
You can start by opening the app and selecting the “Goals” tab in the bottom navigation. Click the “+” button to add your short-term goal. You can browse through the popular options or create your own goal. Give it a name and put the total amount you need to save, along with how much you want to save weekly, biweekly, or monthly.
When you link mimble with your preferred bank account, mimble will take care of the rest to make sure you’re saving for your short-term goals on auto-pilot.
Find an accountability partner to keep you on track
While automatic deposits will help to keep your short-term savings goals top-of-mind, you may also want to enlist an accountability buddy to share your goals with. Any time we make a change and build a new habit, it’s nice to have a dedicated person who can motivate us through the process.
You don’t need to share what your exact financial situation looks like to make it a successful accountability partnership. Instead, focus on celebrating when you reach savings goals and trade tips on how you made it happen.
You may have similar savings goals as your accountability partner, or your goals could be completely different. It doesn’t matter how similar they are. You can still find a way to check in with one another and keep each other on track.
As you invite someone into your goal setting process, be sure to keep that master list of short-term goals close to you. Even if you think a savings goal that the other person has is cool, it’s better to draw from your own list since it’s aligned with your values.
Get active with your savings goals
You don’t need a promotion or raise to start putting money way for your short-term savings goals. When you pick a value-based goal, you’ll be more motivated to actually reach it because it’s something you care about. You can do that at any income level.
You may look at your master list of short-term savings goals and feel like they are non-traditional, but that means you’re following your long-term vision. Stay the course.
You don’t have to spend money on what everyone else is purchasing. It’s best to intentionally spend on what you value. It doesn’t matter if you value a night out with your friends at a newest restaurant in town, driving your motorcycle down Route 66, or backpacking your way through Scotland. Only you can decide what experiences are worth it.
What short-term savings goals are you setting this month?