How to Budget for Long and Short Term Goals

Blinq Blog

Unless you're Mackenzie Bezos or ex-husband Jeff, chances are you budget your money. You know how much of your monthly income you want to spend on groceries, rent, and leisure, and maybe you even put a portion of each paycheck in savings. But what about budgeting for a specific goal? Is it a short term or long term goal? What are the best tools for both?

Identify Your Financial Goals

Your first step should be identifying the kind of financial goal you're trying to reach. Some examples of short term goals are things like: payments toward rent, insurance or student loans, expensive personal items (new car, new fur coat etc.), travel, a wedding or other event, and home repairs/remodels. These goals are more immediate expenses that you will pay in a matter of months and often require a set amount of money up front. In contrast, long term goals are less likely to have a set amount and more likely to be things that you'd like to continue to expand indefinitely, such as retirement funds or college funds. (Of course, things like paying off a loan or a house are a combination of long and short term goals, since a single loan payment falls under short term goals, while paying off the entirety of a loan is more likely to be a long term goal).

Prioritize Your Financial Goals

The next step is prioritizing your goals. As Nerd Wallet puts it, "Work your goals around your usual expenses, focusing on needs like food and shelter first. Emergency and retirement funds are also high priority; contribute to these funds and pay off debt next. Then you can decide how to allocate the rest of your money toward your wants and other savings goals." Essentially, if you only have a small amount of leftover money each month, you shouldn't put it all towards buying a boat if you have student loans to pay off.

How to Create Your Budget

First, if you don't already have one, budget your necessary monthly expenses as precisely as possible. These necessary expenses include paying for food, living expenses, transportation, and recreation. Try to work out how much you spend on these things in an average month, and then consider if there are any areas you could cut down without great personal cost, such as eating out one less time a week. Once you have this basic budget established, create a timeline for your short and long term goals. To do this, you can use this 50/30/20 budget calculator to determine where exactly your money should go.

After you have a plan laid out, all that's left is actually sticking to the budget you created for yourself, and then you can watch your goals get closer and closer to fruition!

PayPath
Follow Us on

Artificial Intelligence is the way of the future, whether I want to admit it or not. Months ago, my friends raved about how ChatGPT saved their lives by writing crucial 10 page essays in 30 seconds or less. Tell Chat to do basically anything, and it will.

Keep readingShow less
Photo by Eliott Reyna on Unsplash
In the era of TikTok, financial advice is just a scroll away. Everywhere you look, creators are making content on everything from budgeting to cryptocurrency – many with no real authority on the subject. Some are propagating get-rich-quick schemes, but some really do have genuine advice to offer. So in a world where anyone can claim to be a finance guru, how do you discern actionable advice from risky recommendations?
Keep readingShow less

Triangle of Sadness Dating Scene

via Triangle of Sadness
People are simple. We all want the same things: a comfortable life, a little treat every once in a while, and someone to clutch when the apocalypse comes. The last one, most of all. But I’m praying for anyone dipping their toes in the dating pool right now. We’re over inundated with choice and everyone is constantly looking over their shoulder for something better. Meanwhile, with all these confusing dating rules and the constantly shifting world of dating etiquette, I’m just searching for someone to look at me and say: “Pookie, you look amazing today.” Is that too much to ask?
Keep readingShow less