How many times have you thought about buying a new car, taking a trip, paying off your debt, furthering your education, or even trying to complete home remodel projects? Then reality hits as you look at finances and tell yourself to keep dreaming. With proper goal setting, you can turn those dreams into a reality. It may not be overnight, but little by little you can work towards achieving them.
To keep it organized, one method to try is by creating SMART goals. SMART stands for specific, measurable, achievable, relevant, and time-bound. The process creates a detailed approach that is planned and keeps your goals and timelines realistic. First, start by creating a specific goal. An example of this would be, instead of saying you are planning for a vacation to the mountains, you would say you are planning a 7-day trip to camp at Rocky Mountain National Park. You will need to determine the total cost of the trip to have a realistic goal amount to save. For example, the 7-day camping trip including all fees, food and airfare costs $800. Next, you want to create a measurable goal, how much you will save each month to help meet that goal. By listing your monthly expenses, you can determine how much is available to save towards your goal(s). Be specific on how much you will save for each goal you make. If you have $250 free each month, you might save $75 towards the trip. The next step is to make your goals achievable. If paying down your debt seems unrealistic, break it up into smaller goals to help work towards an overall goal. Next, make sure the goals you are setting are relevant. Make sure you are considering your most immediate priorities and others that are very important to you. Taking a vacation is important for your mental health, saving a portion of available funds you have each month for this will still leave room for other expenses that may come up. As you are working towards your goals you may need to revise them for any new goals that would take priority over others. You may need to look at your budget from time to time and determine if there are any additional changes you can make to reach a goal(s) quicker. One example might be choosing to bring your lunch to work instead of going out. That might add $25 a week you could add to your savings each month. The final step of the SMART goals process is to create a specifically targeted timeframe. For each goal its important to set a specific day or month, you are aiming for. If you are dreaming of a fall camping trip in October, you can look at the timeline and costs to see if that is realistic. Larger purchases may take months or even years to work towards and that’s ok.
If you make the effort, step by step to work towards the goals you set, you will achieve them. Keep your written goals handy to make it easy to check in on them frequently. If unexpected expenses come up, don’t ditch your goals, just make adjustments. By setting SMART goals you will earn a sense of accomplishment and reach financial goals you never thought were possible.