How to make your S.M.A.R.T Financial Goals:
S– Make sure your goal is specific -helps to narrow your focus
M– Your goal must be measurable -how can you measure whether you obtained your goal
A– It must be achievable– setting a goal that is too hard to accomplish can make you frustrated or lead to the inability to meet your goal in a timely manner
R– This deals with relevance and realistic– why are you trying to meet this specific goal? Can you meet this goal?
T– Define a timeline for your goal- what are the mini-goals you can meet along the way? Celebrate any small successes you are able to get- for example, your overall goal is to save $1000.00 for your emergency fund. Start with celebrating each $100.00 you are able to save.
Make sure you consider short, medium, and long term goals: You can and should focus on more than one area of goal setting.
Short-term goals: Paying down debt, replacing a vehicle, family vacation
Medium goals: Building an emergency fund, saving for your child’s education
Long-term goals: Retirement, paying off your mortgage
All financial goals should have a purpose (why), a dollar amount (cost), and a timeline (target date).
Relevance, reliance, and purpose: Don’t just say your going to save money but you need to decide why you are saving? For example, do you want to go on a family vacation, are you planning on getting married or moving, retirement, higher education for yourself or your children? Give your money a purpose- you need to be able to write out clearly (be specific, be detailed) why are you saving? This will serve as motivation later on.
Do your money and life goals align? You might ask how can you determine if your goals align (match up)? It’s important to decide what your life goals are…. Do you value experiences and seeing the world, do you want to travel and see the world? Do you value education and therefore, do you want to pay for your child’s education?
The first step is to decide on your life goals and priorities (I will post more about this later) but you can start by deciding what is most important to you. This must match up with your overall morals, values, beliefs, priorities, and direction of your life. We all make choices…some people love nature or the environment, while others value family and friends, and others may value technology or fancy clothes and cars.
You need to make time for what is most important to you….what are your life goals and what are your life priorities? You must begin to question whether your actions (the activities you choose to participate in on a daily basis) help you get closer to your goals and priorities or are they doing nothing to add value to your life.