How to Set S.M.A.R.T Financial Goals

When it comes to finances, it is smart (Ha- see what I did there), to be clear regarding your desired outcome. Dreaming about one million dollars and developing an actionable plan for a million dollars are two different perceptive resulting in different outcomes. One gets you no where, while the other makes an idea more possible. S.M.A.R.T. is an acronym that allows you to set actionable goals. SMART stands for: Specific, Measurable, Attainable, Realistic, and Timely.

Let us delve into how you develop an actionable plan for your finances with SMART method:

Specific: This should emphasize what you aspire to occur and you should be clear and easy to digest. (Consider) Answer the following questions:

What do you aspire to do with your finances? 

Why is this important?

How are you going to do it?

Measurable: Define criteria for measuring your progress.

Example of measurable goals: 
I would like to save 5% on each check for the next 6 months.
I would like to invest $50 each week until I have invested $1,000.  

Example of unmeasurable goals: 
I would like to save a higher amount on my next check. 
I would like to be a good investor. 

Attainable: Goals should stretch you, but it should not be a goal that feels impossible. This goal should be something you can commit to and make happen.

Example of attainable goal: 
I would like to spend only $100 a week on groceries.*. (possible)

Example of unattainable goal: 
I would like to buy a car next week that is $20,000.* (not possible) 

* This is a scenario where the individual makes $500/weekly and has not been saving money ever before.    

Realistic: “Is this really something you can do?” Give yourself practical steps and guidelines to get to that goal. Look at your earrings and see how your financial goals fit in respects to your budget. Does your new goals require you to earn more income or to reduce your overall expenses?

Timely: Give yourself a due date. When would you like to accomplish the goal set forward. Would you like to have $1,000 saved within the next three months for a trip or would you like to contribute $6000 to your Roth IRA by the deadline. Having a deadline to achieve your goal will put a level of urgency that creates positive pressure.

"Put a timeframe to the goal."

When it comes to setting and achieving financial goals, utilizing the SMART method will help you get there.