Setting S.M.A.R.T. Goals

January 20, 2023
January is Financial Wellness Month, and one way to achieve financial wellness in the new year is to set S.M.A.R.T. goals. You likely have financial goals you want to achieve. You may get excited about those goals at first, already imagining how good it will feel when they’re accomplished. It’s exhilarating! But as soon as you hit a few bumps in the road, you get discouraged. You may give up, sometimes far too quickly. But are you setting the right goals for yourself? S.M.A.R.T. goals are Specific, Measurable, Achievable, Realistic and Time-based, and they can help you stay on track toward financial wellness.


Make your goal specific, not generic, or vague. Be clear on what you want to accomplish and ask yourself how this goal will put you in a better financial situation. After all, you can't get what you want if you don't know what you want. Let’s say you want to be prepared to handle a financial emergency or surprise expense. A specific goal would be to create an emergency fund to save money for such a situation.


Make your goal measurable so you can evaluate your progress. Express your goal in clear numbers, so you'll know where you are and when you've succeeded.  Using the emergency fund example, set a specific dollar amount you would like to save in your emergency fund (i.e., “I want to save $6,000 for an emergency or surprise expense.”)


One of the biggest obstacles to achieving a goal is setting your expectations too high. The surest way to improve your financial situation is to take achievable steps. If that means taking smaller steps, that's ok. You can always set a new goal after you achieve the first one!


Assess the steps you plan to take to achieve your goal. Ask yourself if those steps are realistic given your current circumstances. Setting unrealistic goals usually leads to disappointment and surrender.


Give yourself a time frame to achieve your goal. This will encourage you to follow through and hold yourself accountable. If your goal is to save $6,000 in two years, you will need to budget $250 per month to contribute to your emergency fund to reach your goal in that timeframe. Is this achievable? Is it realistic give your current circumstances? If the answers are no, adjust your goal to give yourself the best chance at success.
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