Setting Short-Term Savings Goals

Setting financial goals is a key part of building financial stability. By defining clear objectives, you can prioritize your financial needs and make steady progress toward both short- and long-term success. Saving for short-term goals allows you to focus on more immediate, attainable priorities, making your financial journey more manageable. Short-term goals for saving money can include anything from creating a financial buffer to paying down debt or saving for a purchase. These short-term saving goals help lay the foundation for long-term financial health and reduce the stress of managing unexpected expenses and growing undesirable debt.

What is a Short-Term Financial Goal?

Long-term financial goals, like saving for retirement or buying a home, typically take several years to achieve. But what are short-term financial goals? These are financial objectives that can be reached within one year or less. Short-term goals focus on immediate priorities and are usually smaller in scale, helping you build momentum toward your bigger financial plans.

A short-term financial goal might include saving for an emergency fund, paying off a small credit card balance, or setting aside money for a large expense like new furniture, appliances, or a vacation. These goals are important because they help establish healthy financial habits and ensure you’re prepared for both expected and unexpected expenses.

Examples of Short-Term Financial Goals & How To Save

Here are some short-term financial goals examples and strategies for achieving them. Each goal is designed to be reachable within a year or less:

Create an Emergency Fund

  • Expected Time: 3-6 months for one month of living expenses
  • An example of a short-term financial goal is starting an emergency fund. Aim to save one month of living expenses within 3-6 months, then continue building until you have 3-6 months’ worth of living expenses. Automating transfers into a low-minimum, higher-yield savings account such as WECU’s Stash Savings account is a good way to ensure consistent progress.

Paying Off a Small Amount of Debt

  • Expected Time: 6-12 months
  • Paying off high-interest debt is a common short-term financial goal. Using the debt snowball method, you can focus on paying off your smallest debt first while gaining momentum. Reducing your debt load will free up your budget for other financial goals.

Saving for a Big Purchase, Such as a New TV or Upgraded Appliance

  • Expected Time: 3-9 months
  • Planning to buy something significant? Start by determining the total cost and dividing it by the months you have to save. For example, if you’re saving for a $1,000 TV in five months, you’ll need to set aside $200 a month.

Plan a Wedding

  • Expected Time: 6-12 months
  • When planning for a big expense like a wedding, breaking the total cost into smaller monthly or even weekly savings goals can help you stay on track. For instance, if your wedding costs $10,000 and you have a year to save, put aside $834 a month, or around $210 a week. Setting up recurring transfers into a Stash Savings Certificate can help grow your savings over six to 12 months, offering you higher interest while still allowing flexibility to add funds without locking up your money long-term.

Buying a New Phone

  • Expected Time: 3-6 months
  • Instead of financing a new phone, save up for it over a few months. If the phone costs $1,200, set a savings target of $200 a month for six months, or $400 a month for three months.

Saving for a Vacation

  • Expected Time: 6-12 months
  • Set a realistic target for your vacation budget. For example, if you’re planning a $3,000 vacation and have a year to save, put away $250 each month to meet your goal without relying on credit cards.

Pay Off Credit Cards

  • Expected Time: 6-12 months
  • Paying off credit card debt is a short-term goal that will save you money in the long run by reducing interest payments. Aim to pay off the smallest balance first to build momentum.

Where to Save for Short-Term Financial Goals

Finding the right place to save your money can help you achieve your short-term savings goals even faster. Here are several types of accounts to consider:

  • Regular Savings Account: Ideal for very short-term goals that require easy access to funds. While interest rates are typically lower, these accounts provide flexibility for withdrawals.
  • High-Yield Savings Account (HYSA): A HYSA is a great option since it often provides higher interest than a regular savings account while keeping your funds accessible.
    • Some HYSAs may require a high minimum balance to access their best rates. However, accounts like WECU’s Stash Savings offer a competitive Annual Percentage Yield (APY) without a high balance requirement, providing their highest APY on the first $2,500*. This makes it a strong choice for anyone with short-term money goals like building an emergency fund, allowing them to grow their savings with more flexibility and lower barriers to entry.
  • Certificate of Deposit (CD) or Savings Certificate: For short-term goals with a specific deadline, a savings certificate offers higher interest rates in exchange for locking in your funds for a set period. Some certificates, like WECU’s Stash Savings Certificate, provide flexibility by allowing you to continue adding money to the account over time, making it a great option for ongoing savings while earning more interest.
  • Brokerage Account: A brokerage account can be used for short-term goals if you’re comfortable with some risk, though it’s usually best for longer-term goals.
  • Health Savings Account (HSA): If you have upcoming medical expenses, an HSA allows you to save and invest for tax-free withdrawals on qualified health-related costs.

Start Saving for Your Short-Term Financial Goals Today

Achieving your short-term financial goals doesn’t have to be complicated. Set clear, measurable goals, automate your savings, and choose the right account to watch your progress grow.

Start saving for your short-term goals today with a WECU Savings Account!

 

*APY = Annual percentage yield. 6.00% APY on balances up to $2,500; balances over $2,500 will earn .01% APY on remaining balance. One Stash Savings account per member. Minimum opening deposit of $1 is required. Rates are subject to change. Fees could reduce earnings. APY is accurate as of October 18, 2023.