Regardless of your age, you should have both short, and long-term financial goals you are working toward. It is never too early to start saving for your future.
At the end of the day, most people would like to retire as soon as possible, but most people also want to continue their current lifestyle throughout retirement. The only way to assure you can retire at an early age, and also maintain your current lifestyle, is to start saving and planning now.
Planning for retirement is a long-term goal, but, you should also have short-term financial goals you are working toward in the meantime. Short-term goals would include things you are saving for in the near future, months, or years–where long-term goals are traditionally several years or even decades down the line.
What’s the Difference?
Some examples of short-term goals could include saving for an emergency fund, a special event or purchase–such as a vacation, or even paying off debt–such as credit card bills or student loans.
Short-term goals are important, but the big financial picture is to save for long-term goals, the things that will significantly improve your life. Long-term goals take significantly more dedication and commitment over time to achieve. Here’s how you can manage your money and save for both:
Create a Budget
For some people budgeting and saving is easy, but for others, it can be a painful process that seems impossible. Saving for things like your retirement might seem unimaginable, but it can be done.
The best way to make this process somewhat easy is to start as soon as possible. The earlier you start saving and budgeting, the more time you have to earn more money–and the more time your investments have to accumulate interest.
Things like your retirement fund will not grow overnight–it is a long process, but no worries, that’s why it’s called a long-term goal. Deciding how much to put away each month may be hard at first, but once you have a budget in place, it is relatively easy, as long as you stay committed to that budget. You should put aside as much money as possible, while still maintaining your current lifestyle.
Talk With an Advisor
If budgeting and saving is not your forte, you may benefit from enlisting the help of a financial advisor who can help you develop a budget. A financial advisor can even help you come up with your short and long-term goals, along with plans to achieve those goals. Then, it is just up to you to follow the plan diligently.
If you’re feeling lost and you’re not sure what the next step in your life is, an advisor could help you get back on track. It’s important to get your finances in order immediately, otherwise, it’s likely they will spiral out of control in no time.
An advisor can help you manage your short-term goals that could end up helping you out later on in life. For example, by having an emergency fund in place–you will be able to pay for the unexpected. If you are hurt on the job and are looking into social security disability, you may want to hire a lawyer to increase your chances.
This can be expensive–but it’s something to consider if you don’t want a pile of medical bills and debt. Hiring an advisor can be expensive, but it can be worth your while, especially if you want to avoid serious debt or filing for bankruptcy.
Open a Savings Account and Invest Your Money
Where to place your savings is one of the most important aspects of saving and planning. You want to put your money in a place that it can earn the most possible interest, but you also do not want to risk your savings, especially if you are toward the end of your goals.
Younger people can afford to put their money in investments that have more risk and reward because as a younger person, you have more time to save additional funds if you lose your investment.
As an older individual, you would want to place your money in safer, less risky investments, if you were to lose your investment you have less time to save. Where and how to invest your money is an important aspect of saving for the future.
Take Your Goals Seriously
If you have thought about and planned for your future, it is likely the finances of your future were a major piece of the puzzle. Without the proper saving, you will never be able to achieve neither short or long-term goals.
One of the most important factors for financial goals no matter if they are short-term or long-term is starting as soon as possible. The earlier you start the easier it will be to get to your goal.
If you start later, you can still achieve the same goals, they will just take significantly more effort to achieve. You need to develop your short-term and long-term goals now and start saving for those goals today, not tomorrow. With a little hard work, you’ll get there in no time.