What Are SMART Financial Goals?

What Are SMART Financial Goals?

When it comes to setting any kind of goal, it’s best to use the SMART methodology in order to increase your chances of achieving them. SMART stands for goals that are specific, measurable, attainable, realistic, and timely. Originating from the 1980s, the SMART technique has been used repeatedly because of its effectiveness and ease of implementation.

One area where people readily use SMART goals is when it comes to managing finances. It’s especially useful for helping people deal with issues related to debt. Keep reading to learn more about SMART goals and contact a non-profit credit counselling agency if you are struggling with debt.

SMART financial goals

S is for Specific

It’s important to be specific when setting your financial goals. You’ll need to sit down and really think about the Who, What, Where, When, and Why, of your financial goals. For example:

  • Who is involved with the goal? Is it a family initiative?
  • What exactly is the goal? Is it to pay off your debt?
  • Where will it take place (may not always apply)?
  • When will you accomplish this goal (general idea)?
  • Why do you want to accomplish this goal?

M is for Measurable

When aiming to achieve something it’s important to be able to measure your progress. That’s why you should set milestones for yourself like setting a date where you will have a certain amount of your debt paid off. Creating incremental milestones will help you feel accomplished and more motivated to work towards your end goal.

A is for Attainable

Too many people make the mistake of aiming for unachievable goals. You need to be realistic when establishing an objective because otherwise you run the risk of failure and disappointment. When you’re not successful in your efforts there’s a higher chance that you’ll be unmotivated to try again.

R is for Relevant

If your objective is to be able to afford a vacation even though you’re in debt, it might be time to realign your priorities. With the cost of living constantly on the rise, it’s more important that you are financially healthy even if it means sacrificing a trip that you’ve always wanted to go on – or even one that your kids have been begging for. It’s a difficult sacrifice, but paying off your debt should always be your top priority.

T is for Time-Bound

Creating milestones is important, but what’s even more important is establishing a realistic end date – that’s your light at the end of the tunnel. Combining measurable goals with a target end date is the best way to accomplish an objective, and the further you get into it the better you will feel.

Financial planning

Start a SMART Plan Today

Financial well-being is achievable with the right plan and a hefty amount of support. If you don’t know where to begin when starting your SMART goals it might be best if you find yourself a certified Credit Counsellor who can work with you every step of the way towards financial stability. They’ll have the knowledge and expertise that you need to create a realistic plan that works for you.

Ivan Widjaya

Ivan Widjaya is the Owner/Editor of Noobpreneur.com, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.