Set a short-term goal

Many people avoid setting financial goals as they feel inadequate or they feel that they cannot achieve things and thus shouldn’t set themselves up for disappointment. What nonsense! Setting financial goals is so easy, and achieving them should be easy too. Here is a 5 step guide to setting a stress-free short-term goal.

1. Understand the difference between short and long term goals

Firstly, let’s understand what we mean by a short-term goal. This is something that you want to achieve in less than 12 months. If you need longer than that to achieve your goal you’re hitting the medium-term which I define as more than 1 year but less than 5 years. More than 5 years is what it takes for long-term goals. That’s all rather simple isn’t it?

2. Decide on a short-term idea

Now is the time to think of something you would like to save for within the next 12 months. Jot down a few thoughts such as a weekend away, a spa-treatment (or two), an expensive handbag, or perhaps a road trip. Whatever you’re thinking of should be something special and not something you would ordinarily do.

Car services or new clothes are probably things you have to do anyway over the next 12 months so try think of something that will really make you excited.

Now choose the one item from your list that stands out most to you.

3. Calculate all the costs involved

At this point you need to be realistic about all costs involved in your chosen idea. We’re focusing now on financial costs, but you should also think of time and energy. You may not know exact costs but try to think of an estimate.

If you thought of an overseas trip, be realistic about the costs and be sure that it is something you can achieve within the next 12 months. It may be tough and it may require sacrifices, but it needs to be possible.

4. Look at how you can achieve this idea

Now decide how you are going to achieve this idea. Up to now it’s not yet a goal. In deciding how to achieve this look at how much money you must save each month and decide what you can do to save this money. Think about what bank account you will use for this, or you may decide to save cash. Ask yourself the following:

  • How will I feel if I achieve this?
  • How will I feel if I don’t achieve this?
  • What am I happy to give up in order to make this happen?
  • How long do I need in order to achieve this?
  • What can I do right now to start towards this saving?

5. Re-define the idea into a goal

Now that we have thought of an idea and looked at how we can achieve it, let’s write it down as a goal. When creating a goal be sure to write down achievable goals. To say “I want to save enough money for ….” is a bit vague as we could never have “enough”. Put down values and dates and real things that must be done.

An example would be:

“I want to save R4,000 cash within the next 8 months for my weekend trip to the Cederberg. I need to save at least R500 per month and I will do this by doing ……  “

Be sure to make this goal something that is achievable; even if it takes hard work. It is completely pointless to set unrealistic and impossible goals. And if you have never really set goals before, start off small and see how rewarding this can be. Have a look at these ideas to help you keep motivated and focussed.

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Challenge:

Set yourself one short-term goal today. Spend sufficient time deciding what it will be and how you will achieve it.

Write it down and stick it up somewhere that you will see it every day (e.g. fridge or mirror)