Are you tired of living paycheck to paycheck with no money left to actually enjoy life? Does it feel like you’re only making money to pay bills and survive? Do you desperately want a change but don’t know where or how to start? You aren’t alone. I’ve been right in the same boat with you. However, I’ve learned how to set SMART financial goals and it’s been a game changer.
I used to believe that saving money would be impossible. I also used to believe that anytime I got a large lump sum of money I would have to use it all on something unexpected. Sure enough I could never save money. And as expected- whenever I got a large lump sum of money something unexpected and expensive always happened. This was such an exhausting way to exist. But, one day I decided I wasn’t going to be ran down like that, I had to make a change.
Learn 6 steps to setting financial goals
Learning how to set SMART financial goals helped me take control of my money and my life. I bet you’re wondering how you can learn how to set SMART FINANCIAL GOALS too. So, lets get started
What are Smart goals? How to Set SMART financial goals
Smart is an acronym for Specific, Measurable, Attainable, Relevant, Time-bound. Each step is super and equally important. Smart goals can be applied to any goals meaning financial, physical and so forth.
SPECIFIC
When setting a SMART goal, every step is important. Especially being specific. It’s one thing to decide you need to save money to buy a car. But it’s not specific. With SMART goals, specific means knowing exactly what you want or need. In this case, instead of saying “I need to save money to buy a car” you would say “I need to save $1,500 for a down payment on a car”. This is very specific number for a very specific goal.
MEASURABLE
Setting measurable goals is essential so you can keep track of your progress. Of course in order to do this you have to know where you’re starting. If you have a financial goal of saving $1,500 you’d need to identify how you plan to do that.
Some people find it easy to do with budget trackers. Or by going over a few months worth of bank statements to decide where they can cut spending in order to save. People are even picking up side-hustles to earn the extra money they need to save.
If you plan to save $1500 in the next 90 days, you could calculate that you need to save $16 a day. Then keep track of it with a budget tracker. Or you might realize you spend about $25 a day on fast food so you decide cut back. Another option is to pick up a doordash shift to help earn the money you need. In very little time you will have accomplished your goal.
You can see just how important SPECIFIC AND MEASURABLE are in setting SMART financial goals with this one example.
How to set SMART financial goals – Make them attainable!
ATTAINABLE
Attainable – or in other words BFFR (if you know you know).
Choose goals that are realistic to you. I’ll be the first person to shout “you can do anything! Anything is possible” but sometimes it’s okay to realize we have to build up to those things. Yes one day you might have a million dollars in the bank but first, let’s figure out how we’re going to get and save this $1500.
Choosing attainable goals is important so that we are more likely to accomplish them. Our confidence boosts when we smash our goals and gives us the motivation to set bigger goals and kill those too! Don’t set yourself up for failure going after something too big. Take those baby steps.
For example, that car you’re looking for costs $15,000. Realistically, you won’t be able to pay cash for the car in the next 3 months. It’s much more attainable to try to save a $1,500 down payment and still get the car.
RELEVANT
Relevant means we need to choose goals that excite us and will make us want to save, even if it gets tough. We need to make goals that are based on our own personal wants and needs. Achieving goals is more likely to happen if they’ll impact your life. You’ll likely find it more important to save money for a car you need than a car someone else needs. Right?
TIME-BOUND
Lastly, we need to set time limits on these goals. You want to save $1500 for a car? When? Over the course of your lifetime or within the next 3 months? If you’re serious about reaching your goals you need to make sure you are clear about when you want to accomplish them. Don’t get lazy on this part. Give yourself a deadline. It’ll set a fire under you to get this accomplished.
How to set SMART financial goals the easy way
Now that you have a deeper understanding of how to set smart financial goals, let’s talk about how to actually set your goal – the easy way.
I’m going to give you a rundown of my next smart financial goal which is to save for a new laptop. Here’s my break down using the smart method:
Specific– Get a new laptop by my birthday (March basically 3 months from now)
Measurable– I expect it to be around $800. I know I can cut out fast food to save roughly $200 a month but, I can also Doordash to earn and save $9 a day. Plus, I’ve got a budget tracker that I’ll be using to mark my progress.
Attainable– Yes
Relevant– Yes, I want to laptop but also need it because mine is running out of storage and I need my laptop for my blogs!
Time-Bound– Yes I’m giving myself 3 months to accomplish this
Follow these easy, smart steps to accomplish your smart goals and follow along to see if I reach mine!
