SMART goals help you identify what you want to accomplish and the steps you’ll take to get there.
Developing a financial plan begins with developing SMART financial goals. Setting goals helps you decide what you want to accomplish with your money and clearly defines the steps needed to get there. These four questions offer a great framework to get you started.
- What do I want to accomplish?
- When do I want to accomplish it?
- How much money will I need to accomplish it?
- Why is it important for me to accomplish it?
It’s important to write down your answers. This helps you solidify your thoughts and prep for the next step: setting goals that are Specific, Measurable, Attainable, Relevant, and Time-bound.
Planning for Success
Be very specific in terms of what you would like to accomplish. Goals should be straightforward and emphasize what you want to happen. Being specific helps you focus your efforts and clearly define what you are going to do.
Define your goals in a manner that allows you to track your progress and know when you’ve succeeded. Goals can often be broken into a series of smaller achievements with their own target dates, so you can celebrate small wins on your road to success.
Set goals that are attainable and realistic, not just dreams. This helps you remain committed along the way.
Your goals need to be relevant and important to help you stay engaged.
Set a target date of completion. This can be a short timeframe, like a few weeks, through long-term goals which may take years.
Keep in mind that setting goals is not a one-and-done exercise. We recommend reviewing at least annually to account for shifts in your objectives, means or life situation.