How to Balance Your Short- and Long-Term Financial Goals
In the ideal financial world, we’d all have fluffy bank account balances, solid investment portfolios, houses that are paid off and no debt. In reality, it’s difficult to see even one of those goals come to fruition, let alone all of them at once.
One way to actualize some of those dreams, MyFabFinance’s Tonya Rapley tells Call Your Girlfriend’s Ann Friedman in this podcast episode, is to have short-term goals that feed into your long-term goals.
“I think your goals should stack up, I think your goals should stack to each other,” says Rapley. “Honestly if you have a one-year goal, I think that it should be part of your five-year vision and it should be helping you achieve your five-year goal.”
Rapley goes on to explain how her goals stacked when she started her website, MyFabFinance:
“My five year goal was to … actually be able to experience the maternity leave and the maternity experience that I wanted to. And so that next year goal was to create a profitable business, and to generate X, Y, Z in revenue, and then the following year goal was to actually work in that business full time. And then the next year, because I lived in New York City and I refused to have a baby in New York City, the next year was for me to be able to relocate and leave New York City. And then the following year it was like, ok, we’ve done all these things, and now we’re saving for this baby, but all these goals built toward one another.”
If your plan is to buy a house in five or 10 years, than your goal for the next year might be to save for a down payment while living with roommates, and then build your career so you’re able to move somewhere less expensive in three years. These are short term goals, but they all help you reach the destination you ultimately desire.
Of course, not every single goal you set for yourself needs to feed into something grander. But it is a reminder that everything about your money is connected. Minor decisions can make big differences (see: retirement, fees, etc.). Paying attention to your holistic financial health, and not just one component of it, is one of the most important things you can do.
Money Money Money | Call Your Girlfriend