30-Day Investing Challenge, Day 4: Set a Short Term Goal
Eight years ago I had -$48k to my name and spent money like I was a Kardashian, even though I made $25k/year. I knew nothing about investing. I was living paycheck to paycheck in one of the most expensive cities in the country and YOLO-ing my money away. Fast forward to today and my net worth is +$200k, I'm a self-taught DIY investor, and an index fund-obsessed girlie. It should not have taken me 8+ years to get here. If I'd known a few simple strategies about goal setting I could've arrived where I am much sooner.
One of the best ways to get started on your financial freedom journey is to map out the life vision you created in the first challenge using goals. According to an American Psychological Association study, setting goals can:
Make you feel more motivated
Give you a sense of control over your life
Provide you with a purpose
Reduce feelings of anxiety
What Are Short Term Goals and Why Do They Matter?
Short term goals are things you want to accomplish within the next 1-2 years. Examples include going on a vacation, getting a dog, buying a car, holiday spending, wedding gifts and travel, etc. They’re also a great way to break larger milestones into smaller, more manageable pieces. And can use them as an entry point into the investing world.
These types of goals are important when you first start investing because:
They allow you to start slow and get a feel for saving and investing in low risk ways.
They boost your confidence, which is important when you’re dealing with volatile things like the stock market.
If they’re part of a larger goal they create momentum and demonstrate your progress, which makes investing more exciting.
Action Step: Set 2-5 Short Term Goals
Did you know that writing down your goals makes you 42% more likely to achieve them? Think of 2-5 things you’d like to achieve in the next 1-2 years and write them down using this template:
Goal name
Goal description and why you want to achieve it
When you want to achieve it (either a specific date, month and year, or just year is fine)
If the goal is part of a larger milestone, make a note of that — it’ll be important later. Also, feel free to set more than 5 goals if you wish!
Tune in tomorrow for our next challenge: Setting a medium term goal.
Ready to start your journey to financial freedom? My FREE step-by-step investing guide will help build your confidence by walking you through buying your first index fund.
Want to dive in deeper? My investing workbook “Your Journey to Freedom” will show you how to build the life of your dreams and teach you the fundamentals of the investing world.
