If you are wondering how best to set your financial goals, one tried and tested method is to use the SMART goals setting method. This article is a short guide to setting SMART goals
SMART is an acronym of Specific, Measurable, Achievable , Relevant and Time-Bound.
SMART goal setting can be used for any type of goal setting – finance, weight loss, fitness, career goals for example, which is why it is a very useful technique for any aspect of your life
Checking you are setting SMART goals will give you the best possible chance of achieving them.
A Short Guide to Setting SMART Goals
The best way to look at SMART goal setting is to break them down ….
The more specific you can be when writing your goal, the more likely you will be to achieve it. If you write a general goal, such as ‘I want to be rich’, the mind associates this with a general desire and can not comprehend how this could be achieved.
A specific, clearly defined goal will help your subconscious mind to focus on exactly what you want to achieve, and gives you a definite direction.
You will need to ask yourself what you want to achieve, why you want to achieve it, when you want to achieve it by, how it will benefit you if you achieve it and the costs to you if you don’t achieve it. Once you have answered these questions, you will have a definite structure for your goal.
If we take the example ‘I want to be rich’, a far more specific goal would be ‘I will pay off my $7000 loan and have savings of $2000’.
You must be able to measure your progress towards your goal. This will enable you to judge whether you are on track, and make any adjustments. You will also be able to identify any problem areas or sticking points.
Most goals will be broken down into smaller goals or steps, for example if your goal is to lose 20lbs you may decide to lose 5lb each month for four months. At the end of each month you will be able to tell whether you are making progress or not.
You will also need to know you have achieved your goal. That may sound strange, but some goals are more easily measured than others.
If you want to lose weight, how much do you want to lose exactly?
If your goal is to make more money, exactly how much money do you need to make? I could give you a dollar bill, and hey presto, you will have more money! But will you have achieved your goal?
Your goal has to be one that you truly believe you can achieve, or your subconscious mind will give up before you even start.
Some people are tempted to set goals that are so high, they haven’t a hope of attaining them; for example, ‘I will be a millionaire by this time next year’. They are setting themselves up for failure and the loss of motivation and self esteem which comes with it, and may wrongly decide that goal setting doesn’t work.
As an example, setting a goal to lose 50lbs in a month is neither realistic nor attainable. You would fail and believe that you will never be able to lose weight. A far more attainable goal would be to aim to lose 7lbs a month and exercise four times per week.
A relevant goal must move you towards your longer term objectives. Your goals must also be in accordance with your personal values or ethics; if you don’t feel good about pursuing a goal you will be less likely to attain it, and if you do achieve it, it won’t make you feel fulfilled.
There is no sense in setting a goal which you have little interest in achieving, for example setting a goal you feel you should be pursuing because others have suggested it for you.
Sometimes people find the idea of working towards something they really want so scary that they tend to procrastinate by setting smaller goals that don’t actually move them forwards in any way.
Your goal must have a timescale; a date when you want to have achieved it by. If there is no deadline, the mind perceives no sense of urgency, and there is a risk that you will drift into procrastination.
If your goal is to lose weight, set yourself a date by which you will have lost it. Once your subconscious mind has a deadline, it will become focussed and begin to move you towards the goal.
One other key tip is to break your goal into mini steps and set a deadline for each stage; for example if your goal is to take a vacation in a year’s time which you know will cost $3000, you will need to save $250 a month.
Setting SMART goals is a tried and trusted method which should hopefully ensure your financial goal setting success, and indeed your goal setting success in any aspect of your life.