Three Steps to Help Save for Short-Term Goals
Step 1: Be specific about your goal. Setting a specific short-term goal will help you to evaluate your progress toward meeting it. For instance, the vague objective “I want to save money to buy a house” becomes “I want to save $25,000 over five years to put toward the down payment of a house in (town/city).”
Step 2: Take steps to free up extra cash. How will you save the money that you need? Eating out less often, cancelling a gym membership that you don’t use, or downgrading your cable from a premium to a basic plan could easily free up $100 per month or more toward your goal. There are probably many areas where you can save a few bucks. Make a detailed list of what you spend in an average month and see where you could afford to trim.
Step 3: Match your investments or savings vehicles with your goal. Safety and liquidity will be priorities if you need the money within a few years. Stocks can experience extreme fluctuations over short-term p ...