How to Save for Short Term Financial Goals

Money can be "found" in a family's budget.

Budgeting is the key to any saving issue for a household. With proper budgeting and planning, a single person or a whole family can save for and meet short-term financial goals. By simply reviewing the budget and looking for ways in which to save, these goals might be reached even faster than originally projected. Additionally, if the entire family is involved in the process, each member can work together to meet the short- and long-term financial goals.

Things You'll Need

• Budget
• Checking account statements

Instructions

1. Create or update your household budget. Review the past few months of checking account statements and categorize your spending. Be sure to include each expenditure. Create categories such as household, entertainment, utilities, dining out, pharmacy, food and automobile expenses. Include a category of savings, which will be the fund that you contribute to to meet your short-term financial goals.

2. Look for areas in the budget that can be reduced. Limit dining out by cooking more at home. Reduce utility expenses by rate shopping and asking for bundled services. Remove excess services from cell phone and cable plans. Use coupons and shop the sales fliers for a reduction in grocery expenses.

3. Set your budget goals for each category, including the short-term financial goals. While you may not be able to save for the goals in one month, you can work towards the final goal by setting a monthly goal for savings. Place any money "found" in the budget by reducing expenses in the savings category.

4. Review your new budget at the end of the month to see if the reductions helped you to save towards your goals. Reassess if any areas need to be increased or if more reductions can be made. Remember to reallocate all savings to your short-term financial goals.

Tips & Warnings

• Earn more money in the short term to add to your savings. Ask for overtime or extra shifts at your job. Offer to do household chores for neighbors, such as mowing lawns or washing cars, for extra money as well. Sell unused household items through a garage sale or online auction for extra money. Remember to place all this money directly into savings to avoid splurging.

• You may have setbacks in the process, such as unexpected expenses or splurging. Learn from those setbacks and start the process over the next month.

References

• Dave Ramsey: The Truth About Budgeting