Rachel Cruze: 6 Steps for Setting Your Long-Term and Short-Term Financial Goals

Rachel Cruze / Rachel Cruze

It’s easy to feel overwhelmed when trying to set financial goals. Maybe you’d like to save up $1,000 in an emergency fund — but on the other hand, you’d love to take that dream trip to Disney World by the end of the year.

While there are many options at your disposal, money expert Rachel Cruze says it’s important to pick and choose wisely and to tackle your goals in a way that will set you up for lifelong success. “Lots of things can influence the way you set your financial goals, including your motivations, values and dreams for the future,” she wrote on the Ramsey blog. “And the way your parents handled money and even your own spending and savings habits (which are unique to you) also [have] a major impact on how you handle money.”

Cruze also points out that efficient goal planning takes intention and some self-awareness. Below are Cruze’s steps for helping you set your long-term and short-term financial goals.

Be Specific

“One reason people don’t hit their money goals is because they’re too vague,” Cruze wrote. Specific goals, on the other hand, help you clearly define what you want to achieve. Vague goals like “save money” or “invest for the future” lack clarity. Whereas specific goals like “save $5,000 for a down payment on a house in the next 12 months,” provide a clear target.

To set both short-term and long-term financial goals, Ricardo Pina, finance expert and founder of The Modest Wallet, said you first need to identify your priorities. “Start by asking yourself what you want to achieve financially both in the near future and over the span of several years,” he explained.

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“Your short-term goals might include saving for a vacation, paying off a small debt or building an emergency fund.” These goals, Pina said, are typically geared towards immediate needs and can often be accomplished within a year.

Have a Measurable Vision

Measurable goals provide quantifiable results. Instead of vague statements like “pay off debt,” a measurable goal would be “reduce credit card debt by $5,000 in the next six months.” This specificity allows you to see exactly what you’ve achieved.

Long-term goals, for example, require a bit more planning and patience, said Pina. “This could be saving for a down payment on a house, planning for retirement or setting up a college fund for your kids.” It’s important to be realistic and understand that these goals might take several years or even decades to achieve.

Set a Deadline

“It’s super easy to put off your goals when they aren’t time-sensitive,” Cruze wrote. “Stop saying you’ll start someday.”

Once you’ve identified your short and long-term goals, Pina said you can start creating a financial plan and timeline to reach them. “This might involve budgeting, cutting expenses, increasing your income or investing in different opportunities.”

Additionally, he noted that it’s important to regularly review and adjust your goals as necessary to stay on track. “Knowing what you want to achieve financially and having a plan in place can help you make better financial decisions and ultimately lead to greater financial stability and success.”

Get Personal About Your Goals

According to Cruze, we shouldn’t play the comparison game when it comes to our goals. People often have different starting points in terms of income, assets and liabilities. Comparing yourself to someone with a different financial situation can be misleading and cause unrealistic expectations.

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“Just because all your friends are taking out second mortgages to renovate their kitchens doesn’t mean you should,” she cautioned. Instead, Cruze recommends making sure your goals feel personal to you. By focusing on your own goals, you can maintain a long-term perspective and stay committed to your financial plan.

Enlist an Accountability Buddy

When you have someone else aware of your goals, you’ll be more likely to stay committed to them. This sense of responsibility to update your buddy on your progress can discourage you from procrastinating and increase your accountability and overall success.

As Cruze put it: “Having a cheerleader in your corner and knowing you’re not alone can make a huge difference as you work toward your goals.”

Write It Down

Jotting things down forces you to clarify what you want to achieve. Instead of vague ideas, you create specific, tangible objectives. This clarity then helps you stay focused on the precise outcomes you’re aiming for.

“​​Type them in a notes app on your phone, take a screenshot and set it as your wallpaper so it’s the first thing you see when you pick up your phone,” Cruze wrote. “Keeping your goals where you can see them will keep you on track and motivated.”

Pina said it can also be helpful to break down your long-term goals into smaller milestones or checkpoints. “This way, you can track your progress and stay motivated to reach your ultimate goal,” he explained. “And remember, it’s okay if your goals change or evolve over time — the key is to consistently work towards them and make adjustments as needed.”

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