How to Set SMART Financial Goals

How to Set SMART Financial Goals
Generative Networks

Goal setting is more than simply writing down a list of things you want to accomplish every New Year’s Eve. It is a skill that requires practice and discipline, and goal setting is not something most people learn in school. You must review your list of goals often and do at least one task each day that gets you one step closer to accomplishing your goals. When it comes to financial goals the same discipline must be applied. First, set financial goals. Then, put forth daily action to ensure your goals are achieved.

Use SMART Goals to Get Started

The concept of Specific, Measurable, Achievable, Realistic, and Time-bound (SMART) goals was first introduced by George Doran, Arthur Miller, and James Cunningham in 1981. When first discussed, SMART goals were ways to improve project management, but since the 1980’s the concept of SMART goals has been expanded upon to apply to all types of goal setting.

Your financial goals should be SMART. If you are saving to buy a home, striving to pay down mountains of student loans, or trying to start your own business, SMART goals can help ensure your success.

An example of a SMART goal is:

I want to save $1,378 through the RRD Investments’ Savings Challenge by December 31, 2017.

January 1st of this year, my company, RRD Investments, launched a 52-week savings challenge on all our social media platforms. During the challenge, you save $1 the first week, $2 the second week, and then continue to increase the amount you save by $1 each week. If you make all of the weekly deposits you will have $1,378 saved by the end of the year.

My SMART goal specifically states what I want to accomplish and how. It is also time bound with a deadline of December 31st. Most importantly, it is a realistic goal because the RRD Investments’ Savings Challenge only requires you to save a dollar more than you did the previous week, and the highest contribution is in week 52 when you have to deposit $52. This SMART goal is very achievable as long as I follow the challenge and make my weekly deposits into my savings account.

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