Level Up Your Finances with SMART Goals
Get our SMART Goals planning worksheets here!
Ever feel like you're running a financial marathon with no finish line in sight?
It's time to ditch the "winging it" approach to your money and set some clear, achievable goals.
In this week's newsletter, we'll break down the SMART method for goal setting – a proven way to take control of your finances and finally start seeing real progress.
Why do so many people fail at achieving their goals?
We've all been there, haven't we? Setting these big, ambitious financial goals, only to find ourselves falling short. It's like we're setting ourselves up for failure from the start. Often, we aim for the stars without a solid plan, like trying to build a house without any blueprints.
We might have the best intentions, but without a clear roadmap, we're likely to get lost along the way. And let's be honest, life loves to throw curveballs. Unexpected expenses pop up, emergencies happen, and suddenly, our motivation takes a nosedive.
So let's dive into SMART goal setting when it comes to your personal finances.
"The trouble with not having a goal is that you can spend your life running up and down the field and never score." - Bill Copeland
S-M-A-R-T stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
It might sound kinda fancy, but it's actually super simple. Think of it like this:
Specific: This means getting crystal clear about what you want. No more vague wishes like "I want to be better with money." Instead, think: "I want to pay off my $2,000 credit card balance." See the difference? The more specific, the better!
Measurable: How will you know if you're making progress? You need a way to track your wins! So, instead of just "saving more," your goal could be "saving $200 every month." That way, you can actually see yourself getting closer to your goal.
Achievable: Dream big, but keep it real! Don't set yourself up for failure with goals that are impossible to reach. Start with something you know you can handle, and then build from there. Small wins lead to big victories!
Relevant: This is all about your "why." Why is this goal important to you? Does it fit into your big-picture dreams? Make sure your goals are meaningful and get you excited!
Time-bound: Give yourself a deadline! This helps you stay focused and motivated. Instead of just "paying off debt," make it "pay off my credit card by December 2025." Having a deadline gives you something to work towards.
A 2023 study by Northwestern Mutual found that 78% of Americans feel anxious about their financial situation. Don't be a statistic! Take control of your finances by setting clear, achievable goals.
How the SMART framework looks in action
- Identify Your Goal: In this example our final goal is save our first emergency fund. A good starting point is $1,000-$3,000, but you can adjust this based on your personal circumstances and expenses.
- Make it SMART: Now, let's make that goal SMART! For example: "I will save $2,000 in the next 6 months for unexpected expenses by setting aside $333 per month." See how that's specific, measurable, achievable, relevant, and time-bound?
- Write it Down: Don't just keep your goal in your head! Write it down and post it somewhere you'll see it every day – on your fridge, your bathroom mirror, or even your phone's wallpaper. This will keep you motivated and focused.
- Breaking it Down: Saving a large sum of money can feel overwhelming, so breaking it down into smaller, more manageable steps. Instead of focusing on the total amount, concentrate on saving a specific amount each week or month.
- Schedule Check-ins: Life can get busy, but it's important to review your progress regularly. Schedule a weekly or monthly "money date" with yourself to track your spending, celebrate your wins, and make any necessary adjustments to your plan. In our Roots of Personal Finance Membership program we call this the Roots 15 which means spending 15 minutes a day on your finances.
Key Takeaways
- SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound
- Break down large goals into smaller, manageable steps.
- Track your progress and celebrate your successes along the way.Don't be afraid to adjust your goals as your circumstances change
So there you have it! SMART goals are just a fancy way of saying, "set yourself up for success." It's all about being clear, focused, and realistic. And trust us, it works! Don't let your finances control you – take charge and start setting SMART goals today. Your future self will thank you!
Check out an episode of the Debt Free Dad podcast where talk all about SMART Goal Setting:
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