Setting Financial Goals

Jan 10, 2022

The start of the new year is traditionally a time when people set new goals, or resolutions. A lot of people set goals relating to their physical wellness, but what about their financial wellness? In this blog we will talk about setting SMART financial goals, that will help you be successful in 2022!

What is a SMART goal?

A SMART goal is specific, measurable, achievable, relevant, and time specific. Using the SMART goal setting process will increase the likelihood of you accomplishing what you set out to do. You will be able to track your progress, and know what steps you need to take.

Specific- Specific goals help us clearly define what we want to accomplish, and allows us to focus our time and effort. “Increase my savings account to $1,000” is better than “save more money in 2022.”

Measurable- Goals should be measurable, so you can clearly see how you’re doing. This makes it easy to determine when you are getting closer to achieving your goal, and when you might need to refocus. So to save that $1,000 in 2022, break it down by month ($84) or week ($21), and set it into a separate savings account so you can see your progress.

Achievable- Make sure you can reasonably accomplish your goal in the time frame you set for yourself. Setting tough goals can be rewarding, but try to avoid unrealistic targets. Once you accomplish your first goal, you can always push yourself further in your next one. So, to build that savings, take a close look at your budget and decide what you can put aside – maybe at first it’s just the cost of a cup of coffee every week, building over time. Make it meaningful and reasonable for you.

Relevant- Goals should align with your values, and your long-term objectives. If you set a goal that is not relevant to a primary focus in your life, you are less likely to succeed. So, if you want to build that savings account, make sure you have the ‘why’ in mind: What are you saving for? Why? This will help keep you focused over time.

Time Specific- When do you want to achieve this by? The best goals have deadlines. If your goal doesn’t have a specific end date, it will be much easier for you to continuously push off the necessary steps to accomplishing your objective. It can also help to break down a large timeframe into smaller ones. If you want to save $1,000 in a year, how much do you want to save a month? A week? Succeeding at the small goals can help keep you excited about achieving the bigger ones.

Think about what you want, and why.

Putting a purpose behind a goal will increase your motivation. There are many types of financial goals you can work towards, but not everyone has the same aspirations. Some are looking to reduce debt, increase savings, put more money towards retirement, or build good credit. Goals can be short term, intermediate, or long term. Having a mix of the three can keep you focused on the big picture.

Write it down.

Writing down what you want to achieve will allow you to keep your objectives clear, and allow you to continuously track your progress. You can create checklists, and cross off tasks as you accomplish them along the way. This will help you visualize your progress, and it can be quite satisfying seeing what you are capable of in real time!