The Importance of Saving for Short Term Goals

We hear a lot about investing for the long term: for events such as our retirement in several decades from now, for example. However, we don’t tend to hear as much about short term investments and yet these can be just as important in many circumstances.

These investments are ideal when you have a short term goal you want to hit. This could be a goal that requires you to have a specific sum of money to achieve it, or it could simply be a savings goal.

Understanding short term goals

Here are some examples of short term goals you could go for, and how they factor in when we’re thinking about money.

  • A 6 month goal to pay off an outstanding credit card debt
  • A 3 month goal to save up for an online course to provide you with an additional qualification to help further your career
  • A 6 month goal to save $500

As you can see, it is enough simply to want to save a particular sum of money for a particular length of time. You don’t have to have something in mind to spend it on, or even a bill or debt you want to clear. Simply wanting to save is enough of a goal for anyone to aim for – and if you are successful in saving and investing that money for the short term, you’ll find it easier to do so for the long term as well.

Why are short term savings goals important?

We’ve already discovered one reason – namely that they can get you in the mood for saving for the long term as well. But there are other good reasons. For example they can help you achieve long term goals as well.

Take the above example focusing on the ideal of saving up for 3 months to invest in an online course to achieve another qualification. If you were to achieve this goal, you could complete your online course. You’d then stand a better chance of getting a better paid job which would allow you to save more money in the future as well. This is one of the best examples you could consider in this situation, as it represents how easy it is to scale up a small goal into a much larger one.

So if you don’t already have any short term savings goals in place, why not think of one or two to achieve now? It could be as simple as not spending frivolously for the next week, to see how much you can save in the process. It could be a three month goal to help you save up to pay off a credit card debt. Whatever it is, it should be something you can achieve with a little hard work, and something that will give you a good payoff.

You might be surprised how much more positive you’ll feel about saving when you can achieve short term goals such as these.