How to Create SMART Financial Goals
Financial stability isn't easy to achieve, and its pursuit has often been a source of stress and worries for many North Americans. This can be blamed on the lack of financial literacy in the United States and Canada.
There is a clear and definite need for financial planning education, and it all starts with setting the right financial goals.
Your financial goals not only form the foundation of your long-term plan, but they should also align with your objectives and values as a person. Don't confuse them with budgeting, though, because financial goals are clear and measurable milestones that can bring you closer to your idyllic future.
If you've been struggling to set and achieve your financial goals, it's best to work with a
financial planning
expert to help you create realistic goals and understand what you need to do to achieve them.
Here's a quick guide to setting SMART financial goals that get you the financial freedom you want. Read on!
Make Your Goals Specific
Just planning to become a millionaire in the near future won't make you one. Instead, it would be best if you had a specific plan to get you there.
To develop a specific goal, you need to determine what and how much you are aiming for. For example, you can save money, pay off debt, or start a school fund and then decide the amount you'd like to see in your bank account and on what date.
Besides this, you will also need to establish reasoning for why you're doing this. This will allow you to know precisely what your goal is and why you are achieving it.
Make Your Goals Measurable
When your goal is measurable, it is easier to track your progress on it. For example, if you want $6,000 saved in a year, you have to find a way to put away $17 every day.
This will help you understand how much you need to save daily, weekly, or monthly to achieve your goal. You will also be able to track how far you're from your plan and proceed or make adjustments accordingly.
Make Your Goals Action-Oriented
Once you have specified your goals, set up an action plan; for example, your goal is to save $50 per month to buy a car or repay your debt.
You must determine where and how you will get that $50 to achieve your goals. You may even have to cut some existing expenses to get this done.
No one besides you can decide if your goal is attainable. Still, personal financial planning is an essential factor in reaching your objectives the right way. So, map out the actions you plan to take and reevaluate your plan periodically to see if it seems feasible.
Make Your Goals Realistic
Goal setting
should make you feel confident in your ability to be responsible about your finances.
As long as you are reasonable, realistic, and reliable, setting goals and smashing them is very much possible. You cannot depend on a lottery, inheritance, or bonus to set your goals. This can only lead you to a disappointing end result.
The cost cuts should also be realistic. For instance, it isn't right to think that you can forego spending on the necessities of life. This is why it is crucial to ensure the amount you have decided to save matches your finances when setting a goal.
Keep long-term goals in mind at the starting line and plan accordingly. Then, break them down into smaller short-term objectives to ensure they are achievable.
Make Your Goals Time-Based
Once you have planned out everything, you need to set a deadline for yourself. Plan how long you want to give yourself to meet your financial goals. When you set "as soon as possible" as your deadline, it never becomes possible.
Think through your objectives while planning out your financial goals and figure out how long it can take you to achieve them. Then, work on your monthly budget and savings.
Keep reflecting on your progress at regular intervals, even if you are on track to achieve your goals. Then, see if you need to make adjustments as you forge ahead.
Call the Professionals for Personal Financial Planning
Setting financial goals call for a fairly high level of financial knowledge. It's vital to understand the fundamentals of finance such as budgeting, taxes, investments, and various other topics that have the power to affect your finances.
If you are overwhelmed with the pressure of planning your finances, it's time to get professional help.
Our certified personal accountants at
Charles Ghadban Accounting
, based in Ottawa, ON, can help you understand your personal finance and objectives. Call us today at 613-234-7856 or fill out our convenient
contact form
to book an appointment.
It’s time to start your journey towards effective saving!
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