How to Use SMART Goals to Achieve Your Financial Goals

<h2> More than just brain power, a goal strategy that works</h2> <p>SMART goals go beyond making logical decisions, they're about developing an action plan to tackle any financial goal. Your action plan can help you accomplish your financial goals. You might be asking yourself: What is a SMART goal? How do I turn a current goal into a SMART goal? How can I stick to my SMART financial goals? Well fasten your seatbelts because we?re about to get nerdy answering your questions? </p> <h3> The 5 Essentials to a SMART Goal </h3> <p>A SMART goal is about more than just being "smart". It actually stands for something. </p> <ul> <li><b>Specific</b>: Set a <i>specific</i> goal that explicitly states the purpose and amount. </li> <li><b>Measureable</b>: Make goals <i>measurable</i> so you can track your progress. </li> <li><b>Attainable</b>: Goals should be <i>attainable</i> - you want to make sure you're taking steps forward, not frustrating yourself with goals that are unrealistic. </li> <li><b>Relevant</b>: Does the goal truly <i>matter</i> to you? Is it something that will really impact your life, future, etc.? Something that will improve your life would be easier to stick to in the long run. </li> <li><b>Timeline</b>: Put a completion date to your goal, and if it helps, put milestones to your goal to mark when you're half way there or other timelines that will help keep you motivated. </li> </ul> <h3> What's an example of a SMART goal? </h3> <p>You have the definition down, now let's put it to practice. And let's have some fun with it! Let's say that you have a financial goal to take your family on vacation. Let's step through how to make your goal "smart". It's important to note that you do not need to work through the steps in order. In fact, it may not make sense to. </p> <p><li>The first step is to take your goal and make sure it's <i>relevant</i>. Is this something that will positively impact you/your family's life? Taking vacations is part of having a happy life! We agree this goal is relevant; check! </li> <b>Relevant Goal</b>: To save enough money to go on a family trip. </p> <p><li> Now that we have goal that is relevant, let's add some detail to make it <i>specific</i>. To be specific, let's say that you take a family poll and the agreed upon destination is Hawaii. </li> <b>Specific Goal</b>: To save enough money to go on a family trip to Hawaii. </p> <p><li> Now let's add some more detail to make your goal <i>measurable</i>. Let's say you did the research to find out the cost of flights, hotels, excursions, food, and souvenir money and the total amount you will need is $10,000. </li> <b>Measurable Goal</b>: To save $10,000 to go on a family trip to Hawaii. </p> <p><li>Time to add some more detail. The next step is put a timeframe to your goal. </li> <b>Timely Goal</b>: To save $10,000 to go on a family trip to Hawaii in 5 years. </p> <p><li>Finally, let's do a gut check. You have all of the details defined, now it's time to ask yourself if your goal is <i>attainable</i>. Can you achieve saving $10,000 in 5 years? Let's break it down a bit: $2,000 each year, which comes to an average $150 per month. If it's not achievable, then go back to one of the previous steps and see if you can adjust your goal to make it something achievable. </li></p> <h3> Tips for Sticking to Your SMART Financial Goals</h3> <p>1. <b>Set reminders.</b> Life is hectic; it's easy to get distracted or forget to move money from one account to another. Put time in your calendar or set up a reminder so you don't forget your financial goals for the month. And if you forget, no worries! Try to see if you can still complete your goal, even if it is a little off schedule, so you can stay on track. </p> <p>2. <b>Set small goals to achieve large ones.</b> This isn't applicable to all goals, but try setting small goals that help you achieve the large goal. Back to our vacation example: You can set small goals to save $150 each month or save $2,000 each year. This gives you a couple of quick wins and the ability to see progress toward your bigger goal. </p> <p>3. <b>Remember the end result.</b> Sometimes it's hard to stay motivated with long-term goals. Continue to remember what it will feel like once you have accomplished the goal you have set in front of you. Find creative ways to remind yourself of your goal. You could change your computer wallpaper to your Hawaiian island paradise or create a vision board to help you stay motivated.</p>