Now is a great time to get ahead of the curve and start making simple changes so you can achieve your financial goals. Don’t wait to start implementing steps toward your short-term financial goals. It’s not too late to make significant progress before the year ends. Brainstorm what you hope to achieve financially, create achievable steps and set short-term goals you can complete before the start of a new year.

Studies indicate that setting short-term goals foster long-term success. This applies to financial goals as well. If you are uncertain where to begin, read on for five goals that are attainable this year. Get started on the path to financial planning and watch your goals turn into actualities.

1. Save more money through budgeting

Budgeting is a well-known tool, but have you created one to follow? Do you plan both your saving and your spending? Taking the time to plan how much money you can allot toward specific categories, such as food, rent, utilities, entertainment, travel and so on, intentionally directs your money. This will help you keep to a plan and reduce unplanned and impulsive spending, as well as overspending.

Many savings accounts allow you to open additional savings accounts or create separate categories within the same account. Label these according to the goals you plan to achieve. Are you saving for a house, emergency, vacation, wedding or your kid’s education? Plan how much you can set aside from each paycheck, and watch your savings grow.

Consider opening an account that earns more than a traditional savings account. Look into options such as a money market account or separate online savings account, or consider switching to a credit union that offers better rates.

2. Pay down outstanding debt

One of the quickest ways to save more money this year is to reduce debt. Paying off debt frees up more money to put toward savings. Growing interest on credit cards and loans ties up your money, and you pay more over time. Pay these down and keep what’s yours. The faster you pay off outstanding debt, the less you pay in fees and interest. Take this extra money saved for these bills and redirect it toward your short-term financial goals.

Apply simple principles to pay off debt sooner. Choose one of the following strategies:

  • Pay the minimum on all debt, excluding the debt with the highest interest rate. Next, apply extra money to the higher-interest debt. When this one is paid off, move on to the next highest-rate debt. Repeat the cycle until all loans and cards are paid off.

  • Apply a similar method but reverse the order. Pay off the smallest debt first, and then use the extra money to pay the next smallest debt. Repeat until all debt is paid.

  • Consolidate your debt. Use a personal loan with lower interest rates to pay off all loans. Make one payment at a lower rate and pay off debt faster.

3. Save for retirement

Start investing in your future. If you are not currently saving for retirement, now is the perfect time to start. Talk to your employer about 401(k) opportunities. If you don’t have access to a 401(k), consider opening an IRA and begin saving. It might even offer some tax benefits.

You may consider retirement a long-term goal, but each long-term goal is achieved through smaller goals over time. What short-term financial goals will contribute to your plan for retirement?

Maybe your goal is simply setting up an account and making your first small deposit. Once you can comfortably make small deposits, try increasing the amount. Your short-term goal may be to increase your investment incrementally. Come up with a specific number and work on increasing it as you are able. If you have a 401(k) through your employer that offers matching funds, try to give up to their match. Then, refine your short-term goal and increase the amount.

4. Increase the value of your home

Achievable short-term financial goals can include putting money into a home – consider purchasing a house or making home improvements. Investing in housing puts your money to work; rent profits your landlord, while home ownership profits you.

Increase your home value this year by making necessary home improvements. This adds value to your home and yields a larger return on investment. Fund home improvements by using a cash-out refinance or HELOC. Cash-out refinancing uses the equity in your home: you replace your current home loan with a larger mortgage. The difference between the two mortgages is yours to keep. You can then use this cash to remodel your home and increase its value.

A home equity line of credit (HELOC) works similarly to a credit card. Tap into your home’s equity and draw funds as you need them. Use a HELOC to fund ongoing home improvements and only withdraw what you need as you need it.

5. Purchase your next home

Take the next step by purchasing a home. Shop around for loans with the best rates and terms and start your journey. Take advantage of the right loan for your circumstances. What you qualify for depends on income, credit score and debt-to-income ratio. Use your increased savings to save for a down payment or apply for a zero-down payment loan program. If you buy a home without a down payment, use the money saved toward closing costs and paying off your loan sooner.

By budgeting and paying down debt, you may find you can afford to buy a house this year. At Solarity Credit Union, we are here to help you achieve all your short-term financial goals and more. Whether you are looking for better rates, want to consolidate debt, refinance your home, apply for a mortgage or open a checking or savings account with better interest, we are here to help. Contact us today for a better way to bank and borrow.

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