HOW TO ACHIEVE SHORT TERM FINANCIAL GOALS AFTER BANKRUPTCY

In the credit-counseling course you took before you filed, you learned the importance of setting short-term financial goals as part of your money management system.

Setting short-term financial goals helps you in several aspects of budgeting and money management.

Motivation

Sticking to a budget can be difficult, especially if there is no end goal to work toward. Setting short-term financial goals motivates you to stick to your budget by setting goals in sight. You’ll be more motivated to stick to your budget when you have a specific end goal in sight, i.e. “If I stick to my budget for the rest of the month, I’ll be able to set aside the money I saved in an emergency fund.”

Accountability

These short-term financial goals help to make you accountable for sticking to your budget and generally managing your finances. If, for example, your goal was to set aside an extra $25 dollars a month to save for holiday gifts for everyone on your list, if you come up short, you can’t push the blame off onto somebody else. You’re making yourself accountable for your financial success.

Increased Long Term Financial Success

Short-term financial goals are portions of long-term financial goals- if you create a short-term goal to set aside 10% of your paycheck into a retirement fund, you’re really working toward the larger financial goal of building a retirement fund. By meeting short-term goals, you are taking small steps to achieving your long-term goals.

Direction

Short-term financial goals help you to establish a direction you want your life to be going in. Every short-term financial goal that you achieve is another step in the direction you want to be headed.

Setting and achieving short-term financial goals can be simple if you stick to these rules:

Set Measurable Goals

Rather than jotting down ‘save money’, you should try setting a specific amount ‘put $50 from each paycheck into savings’. That way, it makes it easy to hold yourself accountable- specific language and measurable goals makes it harder to create excuses and easier to see if you are meeting your goals.

Set Realistic Goals

Although a goal like ‘Pay off installment loan in 90 days’ is a measurable goal, it may not be realistic depending on how much you owe. Remember that you still have living expenses- if you tell yourself you’ll skip lunch every day in order to pay down your debt faster, you might find yourself having to break your promise to yourself because you’ll be hungry. You won’t be able to meet your goal, and you’ll get discouraged. Setting reasonable goals will help you to gain confidence about your financial management skills- when you set realistic goals, you’re more likely to achieve them. Achieving your financial goals will make you feel good, and help you prepare to tackle larger goals.

Review Your Goals Frequently

Frequently reviewing your goals will keep them on your mind. It will also allow you to make adjustments to adapt to a new situation- situations can change quickly, for better or worse. If you get a new, higher-paying job, you could change your goals to pay down your debt faster or save more money so you don’t end up wasting the extra money on dinners out, fancy electronics, or a new wardrobe.

Be Accountable to Someone

Whether it’s your best friend or your partner, sharing your goals with another person can help hold you accountable to them. If someone else knows that you are trying to save money in an emergency fund or pay down medical debt, you’re more likely to stick to your budget and financial goals so you won’t have to tell them you’ve slipped. Tell your friend or family member your goals, and ask them to check with you periodically.

Learn to Say No

Sometimes, you may have to say no to yourself, friends, coworkers, or family in order to achieve your financial goals- and that’s okay. If friends are headed to an expensive dinner and bar for a birthday, you can say you can’t afford it- nobody will be upset with you. Give the birthday girl or boy a card and set a day you can spend time with them for a day- go see a movie or grab a cup of coffee. Don’t feel pressure to ‘keep up with the Joneses’ if you can’t afford to. If you truly want to achieve your financial goals, you’ll have to make sacrifices- skipping a birthday dinner or group outing isn’t the end of the world.