How to set SMART goals for your money this year (the fun way!)
Setting money goals is about more than just making more money. It’s about taking a smart approach to ALL aspects of your financial life.
Now, what do I mean by all areas? It’s about more than income. It’s also about expenses, debt, savings and investments. All of these areas together create a complete financial picture.
So when you’re planning your money goals for this year, here’s what I recommend…
Set money goals for the 5 major areas of your financial life, and make them SMART.
Let’s talk about how right here!
You have probably heard about the concept of SMART goals before, but let’s review exactly what this means.
A SMART goal is a goal that is specific, measurable, achievable, reasonable, and timely. Here we’ll apply this idea to your money goals.
Now, again, you’ve probably heard this all before. Maybe you even tried the SMART goal thing (with money or something else) and it may or may not have worked for you. But what if you went into SMART goals with not only a different perspective, but also some specific examples for using the SMART criteria?
Let’s get into that right now, and cover ALL the major financial areas that we discussed, and put SMART goals to work for you with some true intention. Grab a pen and paper and let’s get started!
Start by setting SMART goals for all areas of your finances.
That would be…
- Income
- Expenses
- Debt
- Savings
- Investments
Now, let’s get into the process itself, and with examples that I hope will make the process a LOT easier for you.
1-Set a SMART goal around income.
Suppose that your goal is to “make more money.” Is this goal specific? No. But what if you say your goal is to “make a million dollars?” Specific? Yes. Now, next question…
Is it achievable? That depends on where you’re starting from, but it definitely could be. Is it measurable? Yes. Reasonable? Again, could be depending on where you’re starting from. Timely? Well, let’s say you want to make one million dollars by, say, December 31st and it’s currently July 1st and you’re starting with $750,000 a year. That would mean creating a plan to get there in 6 months. So it’s achievable, reasonable, and timely.
Now, if the whole idea of millions of dollars sounds unfathomable to you, don’t worry! This is just an example. You can make a SMART income goal no matter where you’re starting from, and the best part is that it doesn’t even need to be a dollar amount.
For example, a SMART income goal around income could be that quitting your job and taking another offer that pays more. It could be you want to raise your prices in your business to bring in more income. It could also mean asking for that raise or taking a bridge job while you start your business. Anything that relates to making money counts here.
1-Create a SMART goal for your expenses.
This could be as simple as deciding how much you’d like to save in expenses, reevaluating where you’re spending your money, and determining what stays or goes. Decide what you want to achieve around your expenses, set a date to complete said goal, and you’ve ticked this box.
This could be something as simple as reviewing your monthly subscriptions and deciding what you don’t need anymore. It could be switching your monthly subscriptions to annual to save more money. Whatever it may be, choose an expense review and/or expense cutting measure, set a date to complete it, and make it happen.
3-Create a SMART goal around debt.
It could be creating a play to pay it all off, it could be consolidating your debt. Or it could be even as simple as making a plan to simply LOOK at your debt. Anything that fits the SMART criteria applies here.
For example, you could decide that today is the day to finally look at all of your debt and make a list of all that you owe, and promise yourself that you’ll complete the goal by the end of the week. Easy peasy!
4-Set a SMART goal around savings.
Now, let’s consider your savings. An example of a SMART goal around savings could be looking at where your savings stands, and making a plan to save more money each month. It could be setting up automatic transfers to your savings account. It could even be as simple as shopping around for better savings interest rates (I’m a big fan of Betterment for this purpose!) Set a goal, choose a completion date, and follow through.
5-Set a SMART goal around investments.
Finally, consider what you want to achieve with your investments. Is it time to reevaluate where you’re investing your money (stocks, IRAs, etc.) and make new plans? Or is investing something that you haven’t even considered yet and want to start? Perfect! No. matter where you are, just make a plan for the next step, set a deadline, and GO.
Now, let’s say your investment goal is to open up an IRA because you don’t have one yet, and you want to contribute $50. That would be a smart goal. Now put a timeline on that. Let’s say that all you want to do is get into the right mindset to start investing (which is HUGE). You can do that too! Just put a timeline on it and you’re ready.
That’s it! Now you have 5 SMART goals for 5 important financial areas. Now for the best part…
Here’s the last part of this challenge…
Set all 5 of these SMART goals and make them very “smart.” By that I mean a goal that you can achieve ONE WEEK FROM NOW.
Now, with such a short timeline it doesn’t have to be a goal that stretches you TOO far (remember the “achievable” part!). But I challenge you this week to pick at least one of your 5 SMART goals, and complete it within a week.
Are you up for this challenge? Let me know! In the comments below, tell me what your SMART goal is, and when you plan to complete it.
Can’t wait to cheer you on!
Until next time,
Love, light, and MONEY, Honey…
Kaylee
P.S. Setting goals has a LOT to do with how you relate to money. But do you really know how you relate to money? Find out here with my eye-opening quiz and learn about your Money Management Personality!
Take the Money Management Personality quiz right HERE and be prepared to see your money management skills is a brand new light.