This year is rapidly drawing to a close so what better time than to think about some financial goals for 2016. I’ve set and achieved many goals over the years. The best tool I’ve used to help me set goals is the acronym SMART. Today I’m going to outline what that means and give you some SMART goal examples for your money so you can see how it works.
There really is no debate that setting clearly defined goals will help you reach a target. Without something to shoot for how will you know if you’ve achieved anything? And what goals could you possibly set for your money? This is where the SMART acronym is useful.
What Are SMART Goals?
We often make mistakes when creating goals. This leads to frustration when we can’t complete them. Ever say you are going to save money but then never save any money? There are many factors that contribute to why that happened. One reason is that it’s not a very good goal to start with.
It’s not a good goal because it’s vague. What does “save money” mean? Are we talking $50 or $5,000? How long will it take? Can you even reach it based on your circumstances?
This is where using SMART goals can help.
SMART stands for Specific, Measurable, Attainable, Relevant and Timely. Goals that have these five attributes are more likely to be met. That’s because they are:
- Specific. Most goals are too broad. Simply saying, “I want to get in shape” is vague. How will you know when you are in shape? What does that look like?
- Measurable. Can you quantify your goal? Will you be able to tell based on numbers that you’ve achieved the goal? “I want to save money” is an unclear goal. How much exactly do you want to save? Put a number on it ($1,000, $5,000, etc.) so you know exactly what you are shooting for.
- Attainable. This characteristic speaks to if you can actually reach the goal. Saving one million dollars in a year probably won’t be possible if you are a high school teacher. Keep the goal challenging but realistically achievable.
- Relevant. Relevancy refers to whether or not a goal is worthwhile. Is the goal something you should be pursuing based on your life circumstance? Is it the right time and place? A math teacher wouldn’t be teaching her kids grammar…it’s not relevant to what she is supposed to be doing.
- Timely. Goals need to have a deadline. Target dates serve as a motivational factor. They give us a future marker in time that we must meet. Knowing when the goal must be achieved helps push us and keep us mentally engaged in the endeavor.
SMART Goal Examples for Your Money
Making goals for your money can be tough. If you don’t know where to start, here are some SMART goal examples for your money that might serve to jump-start your thinking about your situation:
SMART goal examples on saving:
“I will save $1,000 dollars in a month.”
“I will find 10 coupons per month to save money on groceries.”
“I will put the max amount of money in my company retirement account this year.”
SMART goal examples on debt:
“I will pay off one credit card in the next three months.”
“I will put an extra $1,200 towards the mortgage principal this year.”
“I will save $50 per month so I’ll have cash to buy Christmas presents in December.”
SMART goal examples on spending:
“I will only eat out once per week.”
“I will wait 24 hours before buying any product over $300.”
“I will give myself $50 each month to spend on whatever I choose.”
Long-range SMART goal examples:
“I will put $100 per month in my child’s college fund for the next 15 years.”
“I will be debt free except for the mortgage by the end of 2017.”
“I will give $1,000 per year to the charity of my choosing.”
These SMART goal examples all meet the criteria outlined by the acronym. They are specific, can all be measured by a number, can be realistically achieved, are relevant and applicable to life and have a deadline or time stamped to them. Making goals like this will keep you focused and motivated as you pursue each one.
Of course you’ll have to come up with your own goals to meet your own situation. Take your time and think each goal through. Adjust the wording of it so that it is as clear as possible.
Anytime is a good time to set some financial goals for your life. Making sure the goals are SMART will go a long way in helping you achieve them.
Questions: What other money related SMART goal examples could you think of? What helps you achieve your goals? What financial goals are you focused on for 2016? Have you had any big financial victories this past year?