Short-Term Goals

When you're accumulating savings, a short-term goal is anything less than 6 months away.

After you have your emergency savings fund fully stocked up, you can put the majority of your remaining savings dollars into short-term goals. Mostly because they will get here faster, so you'd better be ready.

Ideally, you will be saving 30% of what you earn. Initially that will be allotted in these percentages: 20% to Emergency Funds, 5% to Short-Term Goals, and 5% to Long-Term Goals.

Once your Emergency Fund is set up and funded, you can reallocate your savings to 20% Short- Term and 10% Long-Term.

FOR EXAMPLE:

• If you make $200.00 a week, you'll start by putting $40.00 into your Emergency Fund, $10.00 toward Short-Term Goals and $10.00 to Long-Term Goals. Later, that will switch to $40.00 in Short-Term Goals and $20.00 in Long-Term Goals.

Reality Check: Nobody lives an ideal life, but the closer you get to this type of savings goal, the easier your life is going to be.

• Let's make a weekend trip to Denver for a concert a sample short-term goal, assuming that you drive up on Friday for a Saturday event and return on Sunday. The concert is four months away. Here's a quick breakdown of some of the expenses you'll need to have covered:

Over the next four months, you'd have to save $141.25 per month in order to reach that goal.

But, let's assume you already have $75.00 in your account to buy your tickets now. That lowers your short-term savings goal to $490.00, so you'd only need to save $122.50 per month before the concert weekend.

That was pretty easy to figure out, wasn’t it? Short-term goals are usually that easy to plan for. Saving the $122.50 each month? That might be a little harder — until you get in the groove of responsible saving.