Going into the new year with a plan for your financial goals is a must. Here’s how the SMART system can help you set realistic and achievable ones.
Specify your financial goals
Take some time to think about what you’d like to achieve financially this year. Once you’ve made up your mind, you need to be specific on what those financial goals are so that you can set up a plan of action that’ll help you achieve those goals step-by-step. For example, instead of simply setting a goal to get a raise, you can specify a desired amount you’re aiming for.
Make sure they’re measurable
Ensure that your goals are measurable so that you’ll be able to know whether you’re on the right track or not. When your goals are measurable, you can tell whether or not you’ve achieved your set goal at the end. So, it’s important to set goals clearly and not blindly. Ask yourself how you’ll know when you’ve achieved each goal, and remember that you can adjust this as the year goes on.
Ensure they’re achievable
Don’t set unrealistic goals that are too ambitious. If your goal seems too high, try and break it down and achieve it step-by-step. For example, if you want to improve your credit score, then you have to start by paying your debts on time for the next six months, then move from that to making sure you don’t take out any unnecessary loans, etc. Setting small goals that build up to your main goal helps you make it achievable.
Set realistic goals
Look at your current financial situation and assess if your goals are realistic based on that. If your situation and your goals don’t align, it’ll be hard for you to achieve those goals. For example, if you aim to be debt-free in the next twelve months but have debt repayments that are twenty-four months, then your goal will be impossible to reach. Rather start with smaller, more realistic goals.
Have a set time frame
For your goal to be realistic, you need to give it a time frame. State when you’d like to have it achieved. This’ll push you to work towards it because you’ll know how much time is left for you to achieve it. A time frame will also keep you motivated, so time your goals and make sure that you follow your deadline.
Setting SMART financial goals will help you achieve them throughout the year. Follow these steps when setting your goals and you’ll never go wrong! Remember to constantly check if you’re still on track so that you can work on things that might throw you off-track. And remember that setbacks are a reality too, so if they happen, don’t let them defeat you. Just pick yourself up and keep going!