When I read about people hitting big financial goals, I get inspired. It’s a huge win to accomplish goals like paying off six-figures of student debt, becoming a millionaire or reaching the status of FIRE (financial independence, retire early).

While learning about those achievements can be really motivating, they can also feel unattainable for a lot of people. Many Americans are finding it hard to get by due to today’s higher cost of living. Many people are relying on credit cards more and more, and with that reliance, credit card debt in the U.S.¹ is at near record highs.

Since I’m all about that happy middle, I’m turning my focus toward short-term financial goals. These are goals that are attainable within a year and can help people make major financial progress in their lives.

Here are 7 short-term financial goals that you can realistically achieve this year.

1. Create your first budget

By developing a budget, you are deciding in advance how you want to use your money.

Oftentimes, we can get surprised by where our money went. “Man! How did I spend $5,000 last month? Where did it go?”

A budget can answer that question for you. And it can help you craft a new story for your money next month. A story of empowerment, financial strength and confidence.

Most of us know how much money we make, but I believe it’s more important to know how much we spend. If we’re not taking charge of where our money goes, then we’re not in charge of our future.

With a monthly budget, you can take charge once again.

2. Eliminate or reduce spending by $1,000 (without killing your joy)

Once that budget is created, you’ll get a good idea of where that money is going. From personal experience, I can say that I don’t always like what I see.

I get mad when I find that I’m still paying for a subscription that I thought was canceled or when my insurance bill is higher than what I signed up for. After the irritation subsides, I take action.

Here are some ways I’ve cut my spending that’s saved me thousands of dollars:

• Canceling unused streaming services ($)
• Negotiating lower rates for my cell phone or cable bills ($$)
• Bundling home and auto insurance ($$$)
• Switching home and auto insurance providers altogether ($$$$)
• Shopping at lower cost grocery stores for the everyday essentials ($$$$)

These expense reduction tactics shouldn’t affect your happiness either. After all, we’re not talking about eliminating your morning coffee or anything. With these money moves above, you could easily free up $1,000 or more in your annual budget. 

3. Create an emergency fund with three months of expenses

Emergencies can derail our financial plans quickly. Pricey moments like a flat tire, a health emergency or a broken refrigerator are to be expected, unfortunately. These things just happen and they cost real money.

Let’s save up for them so they don’t drive us back into credit card debt!

As a goal, you could save between 3-6 months of expenses in an easily accessible savings account. Since we’re talking about realistic short-term financial goals this year, let’s shoot for three months of expenses to start.

As time goes on, you can increase your saving to the equivalent of six months of expenses. Then you’ll be financially prepared the next time the unexpected happens.

4. Banish one debt with the highest interest rate

It is much easier for us to achieve our long-term financial goals when we eliminate high interest debt from our lives. If we’re paying debt with interest rates of 7% or higher, our ability to build wealth can be hindered.

Instead of getting overwhelmed by all the debt you might have, take a look at one debt with the highest interest rate and set a short-term financial goal to eliminate it.

For example, let’s say I have a $5,000 credit card debt with 20% interest. Here are some steps I’d take to crush it: 

• Reduce my expenses to allow for $500 extra each month to attack my debt
• Modify my budget to plan for that $500 per month additional payment
• Set up an automated payment through my credit card provider
• Stay consistent for 10 months
• Celebrate my financial win with people who love me and want to see me succeed!

After accomplishing this short-term financial goal, I’d be ready for another one. Progress is addicting.

5. Increase your retirement savings by 5%

As you start to see more financial wiggle room in your budget, consider increasing your retirement investing percentage.

Many Americans save for retirement through a workplace retirement account like a 401(k) or 403(b). If you’re one of those folks, work with your HR or benefits representative to see how you can increase your contributions this year.

If a 5% increase to your retirement investments feels like a lot, then start by increasing just one percent at a time. The “right savings rate” is truly personal but shooting for 10% or more of your gross income is a great starting place.

6. Craft your will

Did you know that over half of U.S. adults don’t have a will?²

Whether you consider yourself wealthy or not, it’s important to have a will to dictate how your money, personal wishes and family matters will be handled after your death.

And getting your will completed doesn’t have to be overly complicated either. Check out Empower’s guidance on how to get your will completed in 9 simple steps.

7. Track your net worth

One of the simplest and best ways to determine your financial health is by tracking your net worth. This easy-to-calculate math problem will provide you a trackable number that you can improve over time.

Your net worth is calculated by taking all of your assets (all the stuff you own) and subtracting all of your liabilities (all the stuff you owe).

Here’s a quick example of my net worth when I started tracking it:

• Assets = $176,000 (Cash, retirement accounts, home, car)
• Liabilities =  $226,000 (Student debt, car debt, home mortgage)
• Net Worth = -$50,000

Yes, that’s a negative net worth! I owed more than I owned.

With that knowledge, I was able to see clearly where I needed to improve my financial situation. Over the 10 years that followed, my wife and I grew our net worth to over $1,000,000. We eliminated our debt, invested in the stock market and eventually paid off our house.

During our journey, I used Empower’s free  tracking tool. It helped to automate the net worth tracking process by syncing up my accounts. Being able to see our progress over time was very motivating.

By accomplishing that short-term financial goal of simply tracking my net worth, I became motivated to tackle the bigger goals that came in the future.

I found that building wealth is like completing a marathon. And it all starts with the first step.