How to Set SMART Financial Goals

The essential key to achieving financial freedom is creating a set of goals that you can work out. Just like traveling, you can get to any place you want quicker if you know where your destination is instead of wandering about without a purpose. For a goal to be successful, it has to be SMART. These will help you create high-quality objective so that you can easily achieve them.

How to Make Your Financial Goals Smart?

S for Specific

When creating financial goals, you need to know what exactly are you aiming for? A goal should be specific enough so that you can track your progress, measure the effectiveness and be accountable. You need to know what is that you are saving for? A good example of being specific towards your goal is “I will clear $3000 balance on my credit by December 2017”

Being specific allows you to start an action plan for how you are going to implement it, how much do you need to save and how much are you willing to commit to meet your objectives each month. Write all of these to make it a reality. It only means of committing yourself to take action. You should also ask yourself the following questions in achieving exactly what you want:
• What are you striving for?
• How will you do it?
• Who are involve?
• Why is this goal important to you?

M for Measurable

A goal should be measurable. A word rich is not measurable at all but a certain figure such as $1000 is. The progress towards your goal should be visible. Set a specific value to aim your goal and establish a clear vision for measuring your development. An example of setting up a measurable goal is “I will pay $2000 of my credit card in the next 6 months”. Quantitative data is the main factor.

A for Attainable

The goal should be attainable. It means that you need to have actual steps that are easily achievable using the resources and skills that you have. You need to set your mind that you can do it and will commit to it. The example of an attainable goal is “I will save $1000 a year”. Remember that if you are going to commit your time and effort towards your goal, make it sure that you are capable of achieving it. Figure out the ways how to attain it and identify the possible issues that could make it hard to reach your financial freedom.

Ask yourself is your financial goals possible? Do you have the control to make it possible? Creating goals based on assumptions are not attainable. Select a goal that you have the power to attain it on your own and not with other aspects beyond your control.

R for Realistic

Set goals that are realistic and doable. It should always be possible. It doesn’t mean that goals must be easy to become realistic, it should take some effort to accomplish it. Ask yourself, do you have the time and resources to achieve your goal? Is this something you have achieved before? Selecting a goal is that hardly attainable can only lead to failure but don’t set the bar too low. All you need is to be realistic. The example of a realistic goal is “I’ll be debt free in the next 2 years and have an emergency fund of $5000 by that time”.
Many people get frustrated for not meeting their goals because most of them are not realistic at all. If you find your goal unrealistic then change it and work on it. Be creative and true to yourself. It’s one of the key factors to attain success.

T for Time Bound

A goal must be established with a time frame. Example “saving $1000 in a year” is a better goal. Setting up a time frame makes it real. Heaving a time limit does not only give you a motivation to work on it but it will also give you an excitement to look forward to that goal. It also makes you responsible in everything you do and gives you the courage to proceed with these steps to be able to get to a point to where you aim to go. With the use of time bound, it will measure your progress and keep you on track.

SMART-financial-goals

Smart-goals

Don’t forget to Reward Yourself

Finally, after identifying and setting up your goals, the next thing you want to do is prioritize them. Although no matter how we think it’s a great thing to accomplish them all, there are times that it is simply not possible. Sometimes you need to accept some settlement and changes to make it work. After prioritizing your goals, review them properly. Always remind yourself that you aim to achieve something and that will motivate you to keep moving forward.

Whatever your financial goals are, take a time to work in it. Create a SMART financial plan and get excited about the outcome you’re doing for yourself. Work hard on your financial freedom and it will come to you.

For more details about achieving a financial freedom, contact us today.

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