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Setting SMART financial goals

Updated: Dec 9, 2022

For many years I would make a New Year’s Resolution on January 1. And for many years before the first month of the year was over, my resolution had fallen apart. There were numerous reasons this would happen. Usually it was because my resolution was too vague, too large or too unrealistic for me to actually achieve it. After years of feeling like a failure at the beginning of each year, I finally quit making New Year’s resolutions. But I am still working on improving myself in various ways constantly.


One of the best ways I have found to measure goals I make for myself is to make sure it is a SMART goal. SMART stands for Specific, Measurable, Attainable, Relevant and Time-Based.


It is important that your goal be as specific as possible. When I’m working with a new client, I have them set a goal. When they want to pay off debt, we add up the total and write down that specific number. We will also break it up into chunks, usually using the debt snowball. This allows them to visualize the specific goal they’ve set for themself.


The goal must also be measurable. When saving money for a vacation, for example, you will want to be putting your money into a separate savings account. This will allow you to see exactly where you are with your goal. This will keep you focused on your goal, as you see yourself saving money and getting closer to your dream vacation.


Your goal must also be attainable. I have met with potential clients who want to pay off $150,000 in debt in a year, but they only make $100,000/year. While this is a great goal, it is not realistically attainable. Please don’t set yourself up to fail from the beginning. Big goals are great, but make sure they can be reached so you’re not discouraged.


The best goals are relevant to where you’re currently at in your life. I meet with people who want to save for retirement, which is awesome. However, they are drowning in debt and need to pay off their debt first. Sometimes what your ultimate goal is has a few preliminary goals ahead of it .


And lastly, your goal needs to be time-based. As the saying goes, a goal without a date is just a dream. Some goals have short time frames and others can be longer term goals. But a date is critical. It will keep you focused on your goal.


If you need help setting SMART goals, schedule a time with me. I help all my clients create long-term and short-term goals for their lives.


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