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With a new year comes a whole set of new year’s resolutions–to the delight of gyms everywhere–but we all know those commitments fade away quicker than they came. It’s hard to stick with our goals sometimes, especially when it comes to our own finances.
Financial goals go beyond the surface and look deeply at our motivators, opportunities, and threats. A good rule is that they should be S.M.A.R.T. goals so that you have a clear vision of what you are looking to accomplish.
S.M.A.R.T. Goals are
- Specific. Ask yourself the questions: who? What? Where? and most importantly, why? Have a clear idea of what it is that you want to achieve.
- Measurable. No ballparking here! How will you demonstrate you have achieved your goal? For example, if you want to be free of credit card debt, what will you bring to the table at the end in order to prove that you are, indeed, debt-free?
- Attainable. Is this something you can realistically accomplish? You have to look at your situation and be aware of the circumstances.
- Relevant. How will achieving this goal help you in the future? If you want to bring up your credit score, you can assert its relevancy by arguing that it will allow you to buy the house you want in the future because your credit will be where you want it to be.
- Time-bound. Will you do this in a month? 6 months? A year? Make sure you work on a deadline that is appropriate to the level of difficulty of your goal.
Here’s an example of a drawn-out financial goal:
- Laura currently has $1,700 in her savings account. She has set as a financial goal for herself to have at least $5,000 by the end of 2018.
- In order to get to her goal, Laura needs to save at least $275 per month to get to $5,000.
- Laura needs to look at her expenses and responsibilities and decide if it is realistic for her, with a full-time job and being a part-time student at ACC.
- She automates her savings, taking out exactly $275 at every paycheck and putting it into a separate savings account she opened at her credit union.
- Laura does a check-in with her savings account every couple of months to see her progress and reward herself for being disciplined!
- Come December of 2018, Laura achieves her goal of a $5,000 emergency fund!
What are your financial goals for 2018? Do tell!
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