Actually I borrowed the idea from our friends at LSM, who had a great article in their Facebook page about Lorne King, talking about Smart Goals, however, his SMART is an FLA (Five Letter Acronym), S.M.A.R.T. goals: Specific, Measurable, Attainable, Realistic goals, that have a Time frame so let’s set some S.M.A.R.T. or Smart Financial Goals for this year.
What are S.M.A.R.T. Financial Goals ?
S.M.A.R.T. for financial goals (and health or fitness goals) are exactly what you need:
- Specific , vague goals never get attained or worse are far to easy to tick off the list. Specificity like, pay of $5000 worth of debt, is a much better goal.
- Measurable, I have said before if you don’t write it down, how did you know it happened, and being able to measure your goal is in that genre.
- Attainable, saying you want to retire this year (and you are 25) is a lovely goal, but not likely, but, “Put $5000 in my TFSA this year”, is much more possible
- Realistic, if you are carrying huge debt, then a realistic plan is to deal with debt before you start looking at saving.
- Time Frame, set a couple of short-term goals, and then a year-long one, and maybe set up some long-term goals (retiring at 55 for a 25 year old would be a good goal). Don’t create too many, three is usually a good number in these situations.
What Should Your Goals Be?
The important thing to do, is make whatever smart financial goals you might be setting for the new year, that you are comfortable with them, but they challenge you as well. Setting a goal of
“… I don’t want to screw up as bad as last year…”
is not really a smart financial goal, it’s more of a declaration of incompetence. If you are afraid this is your smart financial goal for the year, maybe you need some help.
Tony Robbins has some words to say about Smart Goals as well.
A few good ideas when setting goals for sure. I like to set mine with times and actual results that do not rely on the market because that is something I cannot control. What I can control is how much I put into that account.
Very good ideas too!