Girl, we know you want to achieve your goals. I mean, you have a list of all the goals you want to achieve. You made a vision board at Kendra’s vision board party.
You’re working on it: you are automatically depositing money into your Acorns account, only purchasing classic luxury goods that stand the test of time, and giving thoughtful yet frugal gifts.
You wrote your goals down and you’re visualizing the glorious result when you achieve your goals.
So, yeah, now how do we get this done? Like, actually. What steps do we need to take to make this happen?
The S.M.A.R.T. framework may be the blueprint you need to achieve your goals.
What Is a S.M.A.R.T. Goal?
A S.M.A.R.T. goal is a framework for setting effective and achievable objectives. The acronym stands for:
1. Specific
2. Measurable
3. Achievable
4. Relevant
5. Time-bound
Using the S.M.A.R.T. framework can make your goals clearer and more likely to be accomplished.
Setting goals is an essential part of personal and professional development. However, the way we define our goals can significantly impact our ability to achieve them. This approach ensures that goals are well-defined and attainable, increasing the likelihood of success.
Let’s break down each component:
Specific
A goal should be clear and specific, answering the questions of what you want to achieve, why it is important, and how you plan to accomplish it.
Vague goals like “get in shape” are less effective than specific ones such as “complete a 5K run within three months.”
Measurable
To track progress and stay motivated, your goal must be measurable. This means defining criteria that allow you to evaluate success.
For example, instead of saying “read more books,” a measurable goal would be “read two books per month.”
Achievable
While it’s great to aim high, your goal should also be realistic and attainable. Setting overly ambitious targets can lead to frustration and burnout.
For example, if you’re new to running, aiming to complete a marathon in one month may not be achievable. A better goal might be to run a mile without stopping within four weeks.
Relevant
A goal should align with your broader objectives and values. Ask yourself whether achieving this goal will contribute to your long-term plans.
For instance, if you aim to improve your professional skills, enrolling in a course related to your field would be more relevant than taking an unrelated class.
Time-bound
Every goal needs a deadline to create a sense of urgency and keep you focused. Open-ended goals can lead to procrastination.
A time-bound goal, such as “earn a project management certification within six months,” provides a clear endpoint to work toward.
Example of a S.M.A.R.T. Goal in Personal Finance
Let’s consider an example to illustrate the S.M.A.R.T. framework. Suppose your objective is to have a healthy emergency fund and not feel stressed out about an unexpected expense like a car repair
A S.M.A.R.T. goal could be:
“I will save $300 a month in a High Yield Savings Account for two years until I have $7200 saved in my emergency fund. ”
- Specific: save $300 a month
- Measurable: $7200 in two years.
- Achievable: A realistic frequency and savings goal.
- Relevant: Eases anxiety and fear about unexpected expenses by having an emergency fund to pull from.
- Time-bound: Achieved within two years.
Benefits of S.M.A.R.T. Goals
Using the S.M.A.R.T. framework provides clarity, focus, and motivation.
It ensures that your efforts are aligned with your priorities and helps you measure progress along the way. Moreover, it turns abstract desires into actionable steps, making it easier to stay on track.
Now let’s break these goals down into time frames.
Achieve Your Goals the S.M.A.R.T. Way: The Less Than 1 Year Goal
An example of a S.M.A.R.T. personal finance goal that can be achieved in one year or less is:
“Save $5,000 for an emergency fund by December 31 by setting aside $417 each month from my paycheck and reducing discretionary spending by 20%.”
Breakdown:
- Specific: Save $5,000 for an emergency fund.
- Measurable: Progress is tracked by reaching $417 in monthly savings.
- Achievable: The goal considers your income and spending adjustments to make it realistic.
- Relevant: Building an emergency fund supports financial stability.
- Time-bound: The goal has a clear deadline: December 31.
By focusing on these elements, the goal is clear, actionable, and time-sensitive.
Achieve Your Goals the S.M.A.R.T. Way: The 1-5 Year Goal
An example of a S.M.A.R.T. personal finance goal achievable in one to five years is:
“Save $20,000 for a down payment on a house within four years by saving $417 each month, investing $200 monthly in a diversified mutual fund with an average annual return of 5%, and directing all annual bonuses toward the goal.”
Breakdown:
- Specific: Save $20,000 for a down payment.
- Measurable: Progress is tracked monthly and annually through contributions and investment growth.
- Achievable: The goal considers monthly savings, investment returns, and extra income like bonuses.
- Relevant: It aligns with the personal objective of purchasing a home.
- Time-bound: The goal has a clear deadline of four years.
This approach combines regular saving with strategic investing, making it realistic and focused.
Achieve Your Goals the S.M.A.R.T. Way: The 5 Years Plus Goal
An example of a S.M.A.R.T. personal finance goal achievable in five years or more is:
“Accumulate $100,000 in a retirement fund within 10 years by contributing $500 monthly to a tax-advantaged retirement account and investing in a diversified portfolio with an expected annual return of 7%.”
Breakdown:
- Specific: Accumulate $100,000 in a retirement fund.
- Measurable: Progress can be tracked through account contributions and investment growth.
- Achievable: The monthly contribution is feasible based on current income and budget adjustments.
- Relevant: The goal supports long-term financial security and retirement planning.
- Time-bound: The target is set for 10 years.
This plan leverages consistent contributions and compound growth over time, making it effective for a long-term financial objective.
Conclusion
S.M.A.R.T. goals are a powerful tool for achieving success, whether you’re working on personal finance aspirations, career milestones, or organizational objectives.
By ensuring your goals are Specific, Measurable, Achievable, Relevant, and Time-bound, you set yourself up for meaningful and measurable accomplishments.
Start applying the S.M.A.R.T. framework today and watch your goals transform into reality.
