Setting financial goals doesn't only help you manage your money better. It also influences how you think, stay motivated, and make decisions. Short-term goals, like saving for a holiday or paying off debt, offer quick wins and keep you motivated. Long-term goals, like buying a home or planning for retirement, take longer but lead to bigger rewards. Balancing short-term and long-term financial goals is important because it helps you meet your immediate needs while securing your financial future.

What is a financial goal?

A financial goal is a specific target you set to improve your financial position. These goals act as a roadmap for your financial journey. They help you stay focused and measure your progress.

Short-term financial goals typically focus on immediate needs and are achievable within a few months to a year. They usually involve smaller amounts, making them feel less overwhelming. Examples could include:

• Saving an emergency fund to cover unexpected expenses.
• Paying off small debts such as clearing your credit card balance.
• Saving for a holiday by setting aside money for an upcoming trip.
• Buying a new appliance such as a fridge or washing machine.
• Reducing monthly expenses by cancelling subscriptions or cutting back on take aways.
• Creating a monthly budget and tracking your spending.
• Making a small investment to start building wealth.

Long-term financial goals are bigger and take longer to achieve. They require more patience as they have a timeframe of five years or greater. With these goals you have more time to plan and save, as they align with life’s milestones. Examples could include:

• Saving for retirement by investing in KiwiSaver or Superannuation.
• Buying a home by saving a deposit or paying down your mortgage.
• Setting aside money for education so children won’t need a student loan.
• Making a bigger investment to grow your wealth.

Planning for short-term financial goals

To stay on track and build momentum, break down larger short-term goals into smaller, more manageable steps. Here are some strategies that may help:

• Track your spending: Use an online budgeting app or spreadsheet to identify where your money goes each month. Then adjust and make changes as needed.
• Prioritise your goals: Focus on your most urgent needs first, like saving an emergency fund.
• Cut back on discretionary spending: Stop buying non-essentials to free up funds for savings.
• Automate your savings: Set up an automatic transfer from your everyday account to a dedicated savings account.

Planning for long-term financial goals

Long-term financial goals, like retirement or saving for your child’s education, take careful planning and time. But the earlier you start, the more your money can grow over time.

• Get investment advice to ensure your money is working for you.
• Book a mortgage review to check your home loan is set up to benefit you and that you’re getting the most favourable interest rate available.
• Review your insurance to check you’re not under or over insured. Talk to an Astute Insurance Adviser today.
• Get advice about your KiwiSaver to check in you’re in the right fund.
• Focus on consistency by setting aside a portion of your income every month or making automatic contributions to savings.

Whatever your financial goals, it pays to get advice from a professional. Contact Mortgage Express today to connect with a mortgage adviser. Get help reviewing your mortgage, refinancing your home loan, or applying for a first home loan.