Financial goals that are most successful when they're set with SMART goals in mind can be the most productive ones. This process helps identify your financial objectives as specific, measurable, attainable, relevant and time-bound goals.
Short-term financial goals typically take less than one year to accomplish, such as paying off debt or saving for an upcoming vacation.
Long-term financial goals typically involve setting targets that require multiple years to accomplish, such as purchasing a home, funding college educations for your children and retiring comfortably.
Set Specific Goals
No matter how large or small, having a clear plan to help achieve any goal will keep you focused and on track. The SMART goal framework has five characteristics to ensure success: specific, measurable, attainable, relevant and time-bound goals.
An effective, attainable, and relevant goal could include increasing sales revenue by 10% within six months by launching a marketing campaign.
Goal setting makes teams more motivated, providing them with an organized path toward reaching their targets. Even if a goal is missed, a calm evaluation can reveal learnings which can be applied towards future planning processes. Furthermore, when goals are accomplished they create an amazing sense of fulfillment which promotes commitment and fosters willingness to try again - essential ingredients of a healthy workplace culture!
Create a Budget
Setting SMART goals is an integral component of financial management. Goals should be specific, measurable, attainable, relevant and time-bound in order to keep yourself motivated as you work toward your financial objectives.
Start by listing your monthly income and expenses; if your spending exceeds what your earnings, your top priority should be to adjust this imbalance as quickly as possible.
Once you understand your cash flows, create a budget to prioritize needs, wants and savings. For example, consider allocating 50% of your net income towards necessities like rent and food costs; 30% towards lifestyle expenses like dining out and new technology purchases; and the final 20% toward savings or debt repayment.
Set both short- and long-term financial goals. Your short-term goals could include saving for a vacation or paying off debts; your long-term ones could involve investing in property or retirement plans.
Create a Savings Plan
A savings plan is an effective way to set aside money for a specific goal and stay focused and motivated when saving. Prioritize large expenses so that your budget does not get exceeded while also setting aside enough for an emergency fund in case unexpected issues arise.
SMART goals are made up of specific, measurable, attainable, realistic and time-bound targets to push you further and create a clear roadmap to reaching your financial goals.
Sharing your goals with others is one way to increase the odds of your success, such as having an accountability partner help keep you on track and provide encouragement when things become challenging. Furthermore, seeking advice from an advisor who specializes in financial matters could provide support and assistance as you craft an investment plan specifically tailored for you and your needs.
Track Your Progress
As you work to meet your SMART financial goals, it is vitally important that you regularly evaluate and measure your progress. Doing this allows you to stay on track, adjust if necessary and celebrate successes along the way.
If your short-term financial goal is saving for a vacation, for example, setting an objective such as "save $100 each week" can give clear, quantifiable metrics against which to measure success and create natural checkpoints that help ensure that goals align with overall financial aspirations.
Are You Saving For a Major Purchase, Reducing Debt or Investing Wisely? A Vincere Wealth Associate Financial Planner Renee Marinez can assist in turning your goals into reality and developing an actionable strategy that puts you on the path towards financial freedom and success. Get in touch today so we can get you on your path towards financial security!
