June 21, 2021 5 min read
Goal-setting is a very important part of the personal finance process. We all have goals, things we want to accomplish with our money. There is an effective and simple way to write meaningful and attainable goals so you can build a strong money game.
This is known as S.M.A.R.T. Goal-Setting. You may have heard this acronym “S.M.A.R.T” before, today we are going to break it down and walk you through why setting S.M.A.R.T goals are the most effective way to make sure your goals will get you where you want to go.
Let’s start with breaking down the acronym and what it stands for:
When you’re thinking about what you want to accomplish and how you’re going to get there, you need to make sure you’ve addressed all five of these categories as you’re writing down and developing your goals.
Let’s walk through a sample goal and show how each part of the acronym applies.
Here is our scenario:
Our goal-setter likes to watch live hockey but doesn’t have a local Team in her hometown. She has to travel to watch hockey games live.
Her goal, to see as many hockey games as possible this year. You might’ve guessed, but we are talking about one of my goals! I think using a real goal is the best way to see how the SMART goal-setting process should be applied.
Traveling to watch hockey is one of my personal goals. But it’s a rather vague goal. I want to watch hockey, alright. How am I going to do it?
This is where we make a plan using the S.M.A.R.T acronym.
Let’s take my goal and improve it:
"I want to travel to different cities and watch live hockey."
Estimated total trip cost = $1,225
If I am going to save enough for 5 trips I would need $6,125 saved.
5 games * $1,225= $6,125
Is this attainable for my financial picture? This is something I am going to have to review. If it is not, I would need to to reduce the number of games I am planning to see to make this goal more attainable.
Everyone has their reasons and those reasons yield a result. Make sure your goal lines up with your personal wants and needs.
Have I given myself a timeline? In the original goal of watching hockey. I didn't give myself a timeline on seeing 5 games in 5 cities. Now we need to assign a timeline so I can decide when and how I am going to hit my goal.
That is just one example of writing a S.M.A.R.T. goal, take your own approach and make your goals work for you. In some cases, you may need to adjust or change your goals and how you are managing them, that is normal. Be flexible and give yourself the opportunity to make changes.
For more money tips, videos & additional articles, subscribe to our email list atwww.financialfootwork.com
Comments will be approved before showing up.