Thursday, September 13, 2012

Be S.M.A.R.T. setting financial goals.

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  You probably already know that I LOVE goals. I create a daily list of things I want to achieve, I make mini-monthly goals, I still try to work on my New Years resolutions for 2012. I think, goals are extremely important in our life, and especially when we try to achieve financial freedom. We all have something we work for. Whether it's to get out of debt, to pay off mortgage, to send kids to college, to have enough money set aside to retire, to save for a vacation or for something smaller (like a carpet in your living room wink...wink...:)

   Yesterday at my Church there was a fun "Back to school" activity for women with different classes organized by some awesome ladies. And one of my favorite was Math (aka finances. Don't understand me wrong, Math was never my favorite class. I personally wish they would have a finance class back in high school. Not instead but in addition...). I especially liked the idea of how to be S.M.A.R.T. with your financial goals. I wanted to share it with all of you. So S.M.A.R.T stands for:

S- specific
M- measurable
A- achievable
R- reportable
T- time bound

These are some awesome steps for setting your goals:

BE SPECIFIC. It's a lot harder to achieve a general goal. The idea of getting out of debt can become overwhelming. But when you set a goal to, let's say, pay off this particular credit card by Christmas taking certain steps, the horizon seems much closer.

CREATE A MEASURABLE GOAL. Literally. When you have a certain plan in mind, it's easier to work on it.You need to identify the key points of what you really want to achieve and take measured steps towards it. Create an outline or a budget with the points that you want to reach with every step.

GOALS SHOULD BE ACHIEVABLE. Duh...I believe this one should be the easiest! But I don't know how many times I created unrealistic goals for myself. It's pretty silly to hope to be able to pay off 30000 of debt when you make 40000 a year. But it could be tempting to think you can pay 20 grand. I think the gazelle intensity works great but I do believe gazelles stop for a brake too. I noticed that when I create a long-term goal, it helps me when I divide it into shorter, more realistic goals. Like to see where in my payments I will be after a quarter of year etc.etc.

IT HELPS WHEN YOUR GOALS ARE REPORTABLE. And that's where, I think, we, bloggers, can all relate. Ever since I started this blog I noticed how much more I achieve every month. I'm not doing 100% perfect with my goals but telling you, guys, about them (reporting:) really helps me to be more responsible. Who wants to look like a failure when so many people are reading about it, right? :) I think it also always helps me to put everything on a paper (or in a computer) like in a spreadsheet or a detailed budget. Visualizing your goals and and your income, your assets really helps to see a perspective.

CREATE TIME-BOUND GOALS. As I mentioned above, it helps to see where you stand if you create short-term goals to help you work on your longer ones. But whatever you do, it's important to have a timeline. If somebody says that they want to pay off their debt but don't limit themselves with a time-frame, they are more likely to fail.

   To sum it all up, the S.M.A.R.T. idea is very popular in setting goals in general but I think it's a great concept for helping with your finances. You don't have to have every single step planned out and written down. But if you have something specific lined up for the next few months of your life, you will see a great improvement in your financial situation.


  1. I am going to work on some goals this weekend using the SMART method. Thanks for describing it.

  2. I learned about quantifying goals like that in my psych class! It helps a lot.

  3. GREAT concept...definitely worth passing this information along. thank you!

  4. Thanks for sharing!!! Love the SMART way of doing things

  5. I was thinking of you and your blog and all your great goals when Cindy was teaching the class. She did a great job and I'm glad you recorded this - no matter how good we are, we always need a reminder.

  6. I am a big fan of the SMART method. Keep the word going!


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