Saving Money

Balancing Saving for the Short and Long Term Goals

types of saving, short term savings goals, long term savings goals

Short and long term goals are something that we all like to achieve. Sadly, there are only a few of us who reach the pinnacle of financial success. This is often because we do not know how to manage our short and long term goals properly. Most people focus on short term goals. They like to get instant gratification in the present, at the expense of larger gains in the future. This explains why few Americans have saved enough for retirement. If you are someone who wants to practice saving for short and long term goals, it requires that we learn some basic financial principles.

Debt Slows Down All Types of Saving

A lot of people in the United States are deeply in debt. Being in debt makes it harder to save for goals. While a lot of people view debt as a necessity that they will die with, they fail to see the enslavement that debt brings to a personal budget. If you have to pay thousands of dollars every year to a bank to pay off your loans, you are forced to make financial decisions that may not reflect your own personal saving goals. People who are free of debt are free to make the decisions they feel are best to improve their family’s future. This gives them the room to breathe when they have to make important decisions. If you do not know how to get out of debt easily, try Dave Ramsey’s snowball method. Start with little debts first, and then this encourages you to make a dent in the larger debts.

Set Realistic Goals

Most normal workers cannot afford to send their children to Ivy League colleges. Most normal workers cannot plan on becoming billionaires in their lifetime. Most normal U.S. workers will make an average of $64,819 per person if they are in a stable marital relationship. Spending more than that is a recipe for disaster. Try to use savvy web tools like the cost of living map at numbeo to make your living situation easier for everyone.

Buy Low and Sell High

Most people like to buy high and sell high, or buy high and sell low. They love to work hard for their communities. They also love to party and spend hard after work. When your purchases and expenses have a similar value, it is hard to pull out enough profit to meet short and long term goals. The best financial plan prioritizes minimalism in purchases, and keeps excellent performance at work. If you are a hard worker who is thrifty with your expenses, you will pull in a heavy profit for your household goals. If you are a lazy worker who spends heavily, expect to be a stooge of the credit card companies for the rest of your life. This is simple economics, but it is often hard to fix the habit yourself if you are not careful. Car title loans will become necessary if you are not good at managing your finances.

It is hard to become financially free. That is why there are few billionaires in the world. If you want to become financially free, and able to plan your goals more successfully, the best time to start is today.

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1 Comment

  • Excellent blog, I agree that one must set realistic goals, be specific. Figure out how many weeks or months there are between now and when you want to reach your target. Divide the estimated cost by the number of weeks or months. That’s how much you’ll need to save each week or month to have enough money set aside.

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