3 Short-Term Financial Goals Worth Setting

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We’re not even two months into 2023, and if you didn’t make a New Year’s resolution about your finances, it isn’t too late. But, you wonder, where do you even start, given everything you hear about volatility in the stock market, inflation and the chance of a recession?


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By listening to what other Americans who face the same financial questions have to say on the subject, Fidelity Investments’ 2023 Financial Resolutions Study paints a good picture of just how your peers are approaching their finances this year.

The main focus for people right now is setting short-term goals, according to 53% of the 3,020 respondents to the study questions. Fidelity reports that this is a reversal of how people who planned to save money during the year typically answer whether long-term or short-term financial goals are more important. In 2010, for example, 59% of respondents said focusing on long-term goals was their biggest financial goal.

Planning for retirement, saving for college and mapping out a strategy for long-term care are long-term goals. But what short-term financial goals make sense given the economic climate of 2023? Read on to learn more.

2023 Behaviors Rooted in the Pandemic, Inflation

In 2020, when the pandemic struck and businesses and restaurants shut down or limited operations, 18 million people were temporarily laid off by April of that year, according to the U.S. Bureau of Labor Statistics. And since then, the financial focus for many Americans has shifted. For some, it’s been a shift toward making sure they could survive if their source of income went away. For others, namely the participants in what became known as the Great Resignation, it meant shifting jobs to prioritize health and family over work, according to an NPR report.

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The Fidelity study says 2023 is expected to be “the year of living sensibly.” Respondents said inflation is dragging down Americans, with 37% indicating they had “significantly less money” in 2022. Among respondents, 43% said inflation and its impact on day-to-day expenses and their ability to save was their top worry for the year. After that, it was economic uncertainty/recession (39%), unexpected expenses (38%) and political uncertainty (25%).

Shift to Short-Term Financial Goals

Given that Americans are having a more difficult time seeing the long-term financial big picture, it makes sense to look at shorter-term goals. Here’s how people are planning for “the year of living sensibly,” as shown in the Fidelity study.

Build an Emergency Fund

The National Foundation for Credit Counseling recommends building an emergency fund that will take care of three to six months of living expenses in the case of an unexpected financial downturn. But when you’re living paycheck to paycheck, how do you even start such a fund?

Start small, the foundation recommends. Open a savings account dedicated just to emergency funds and ask your employer to divide your direct deposit between the two accounts. Even if you can only save a small amount of your earnings, it’s a starting point. If your take-home pay for each paycheck is $1,000, you might not notice $30 is gone from your budget if you decide to save 3%. If you do, a slight budget modification could take care of the shortfall.

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You won’t save three months of expenses overnight but taking that first step is crucial. Also add any windfalls, such as a percentage of your tax refund or earnings from a side job you might take on.

Pay Down Debt

Those making financial resolutions hope to achieve “greater peace of mind” and “live a debt-free life” in 2023, per the study.Paying down credit card balances is a great starting point for both those goals.

That’s because your credit card debt is unsecured, unlike your mortgage or auto loan. And because it’s unsecured, the interest rate is higher — and growing even more with the Federal Reserve raising interest rates eight times in the past year. Forbes reported that the average credit card interest rate is now 23.77%, up from 20.4% in November 2022.

If you don’t have extra money to pay more than the minimum due, investigate the option of a 0% interest credit card that will allow you to transfer your balances and give you a specific amount of time to pay off the balance without any interest accruing. Discover, for instance, offers a card that carries no interest on purchases or balance transfers for the first 15 months.

Think Conservatively

The Fidelity study said 66% of respondents were considering a financial resolution this year, and more than one-third of Americans indicated they were worse off financially than a year ago. And that has led 39% of people to resolve to save more money, 32% to pay down debt and 28% to spend less money, Fidelity reported.

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In the study, 75% of people responded positively that they intended to “proceed with caution” because of the “state of the world and economy.”

The Bottom Line

If you’re on the fence about making a financial resolution of a plan, give it a try. According to the Fidelity study, more than 80% of people said preparation with a plan helps them to better deal with unexpected financial issues. Plus, 73% of people who make a resolution believe they’ll be better off financially in 2024, compared to 49% of those who aren’t making a resolution.

Isn’t that what we all want?

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