Here Are Americans' Top 3 Short-Term Financial Goals for 2022
- A recent survey reveals Americans have specific short-term goals.
- You may want or need to prioritize other things.
How do yours compare?
The start of a new year is a good time to establish short-term goals, and Americans seem to be set on specific objectives. In a recent New York Life survey, the top three short-term goals identified by respondents were paying for a vacation, buying a car, and buying a specific product. But while these are all good goals to aim for, you may want to focus your efforts elsewhere.
How do your savings look?
There's nothing wrong with wanting to take a vacation or upgrade a cellphone or laptop. But before you focus on a goal like that, it's important to assess your savings account balance and make sure you're truly set for emergencies.
As a general rule, it's important to have enough money in the bank to cover three to six months of essential bills. The logic is, if you were to lose your job or get hit with some unplanned expenses (like home or vehicle repairs that can't wait), you'd have ample cash reserves to tap without having to resort to debt.
If you have enough money in savings to cover at least three months of essential bills, then you're in pretty good shape from an emergency fund standpoint. If not, it pays to divert all of your extra money to your savings and then start socking cash away for things like a trip or a car.
Are you carrying unhealthy debt?
It's one thing to have a mortgage you pay off over time; that's considered healthy debt. But credit card debt is a different story. If you owe a chunk of money on your credit cards, then it pays to focus on eliminating that debt before setting money aside for a vacation or a specific item.
If you want to knock out your credit card debt faster, you might consider doing a balance transfer, especially if you qualify for a 0% introductory APR on a new card. Avoiding interest charges for a year or longer might make it easier to pay down your debt so you can then focus on other objectives.
Maybe your emergency fund is in solid shape and you aren't carrying a balance on any of your credit cards. If so, then by all means, make 2022 the year you save for a dream vacation, upgrade to a nicer car, or make a big purchase, whether it's electronics or a new piece of furniture that improves your quality of life. But if your savings still need work and you're carrying around pesky credit card debt, be sure to focus on those items before tackling the aforementioned ones.
Not having adequate savings could put you in a precarious financial situation when you least expect it. And credit card debt can not only cost you a lot of money, but cause damage to your credit score. Addressing these items should really top your list of short-term goals.
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