By short term goals we mean those goals which you intend to fulfill in the next 1-2 years. It could be holidaying abroad, buying your most desired camera, repaying a loan etc. Although the long term goals are considered to be planning for the future, short term goals should not be put away.
For your short term needs start investing from today. Acting on impulses and availing a personal loan or a credit card is something that is not sought after. It is not like able if you are fulfilling your desires at the cost of securing your long term finances.
Even for the short term goals, it is best you opt the equities route. Investing in the right financial assets for about 24-30 months can definitely guarantee you Rs 6 lakh at 12% p.a., considering you have invested Rs 20,000 monthly. It is advisable to take the systematic transfer plan route after the 30th month to shift the accumulated wealth from a balanced fund to safe funds such as money market or liquid funds since the market is very dynamic and there are possibilities that it can move downwards.
Ankur, 21, just got a job last year after graduating from college, where his income is Rs.21,ooo. He wishes to pursue his MBA from one of the best institutions in India. Definitely, it would cost him well between Rs6-8 lakhs. Considering the tight financial situation, it will be better if Ankur can manage to cut down on all unnecessary expenditure and save almost half his salary in RDs. Currently since the interest rates provided by banks are higher, it can be assumed that he can save around Rs 3 lakh. The rest of the amount can be financed by taking a loan since, there are probable chances of him to earn higher once his program is completed and he can manage to repay his loan 5 years down the line.
If you are planning to repay the loan on your credit card, try to liquidate any assets and repay the loan. Breaking your FD (considering the penalty) or liquidating your gold assets etc is advised in such situations. However, if you are devoid of possessing such assets, you can approach the bank and sign up for a personal loan and prepay the amount. Although this step is necessary, it is not advised under all situations.