What are SMART Financial Goals Examples? How can you get achieve them?
Well, you’ve come to the right place! Smart financial goals examples can seem daunting, but they don’t have to be! Here, we’ll dive deep into what makes a financial goal SMART, and will list a few examples of what these could be! It’s super simple; follow along!
SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. This is often used as a framework for setting goals.
Specific
Measurable
Achievable
Relevant
Time-bound
S – Specific
A goal must be clear, well-defined. Typically answers the what, why, and how.
M – Measurable
Essentially quantifying the progress of a goal so that it can be easily tracked.
A – Achievable
A goal must be realistic and achievable using the available resources and time.
R – Relevant
A goal must be align with your values and long-term financial goals.
T – Time-Bound
A goal must be tied to a deadline. This helps create not only a sense of urgency, but also works as motivation to push you to achieve the goal.
This post is about SMART Financial Goals Examples.
So we’ve defined what SMART is, how does this apply to financial goals?
The SMART framework helps create actionable goals while setting a clear goal. It forces you to set goals that follow the criteria. Doing so actually increases your chances of achieving them, because you’ve set a clear path to reaching the goals while being able to easily track the progress. Using the SMART framework and applying it to financial goals helps to set a clear path to achieving said goals and ensures trackability by being able to quantify progress.
SMART Financial Goals Examples:
1. Save $20,000 for a downpayment in the next 2 years.
- Specific: Saving a specific amount for a specific purpose. In this case, it would be for a down payment for a property.
- Measurable: Take the goal of $20,000 and divide it into sizable chunks within the next 2 years. It would mean contributing ~$833 every month.
- Achievable: This is achievable if you’re able to set aside $833 every month without overstretching yourself. Obviously, this is just an example and you can adjust the numbers to whatever your situation is.
- Relevant: Saving up for a property can be a financial goal for many.
- Time-bound: The deadline is 2 years. By setting a deadline, you can work backwards to achieve it.
2. Pay off $5,000 credit card debt in the next year.
- Specific: Paying off a specific type of debt
- Measurable: Progress is trackable to see how much debt has been paid off over a certain period of time.
- Achievable: You’re making a plan based off the total amount and time to pay off a certain amount each month.
- Relevant: Paying off debt is a great place to start your financial journey, especially high interest rated debt. Check this post for more info on the different methods of paying off debt.
- Time-bound: The deadline is 1 year. By setting a deadline, this acts as motivation to make progress towards the goal.
3. Save $6,000 for emergency fund within the next year.
- Specific: Having an emergency fund is important and one of the top recommendations when setting up financial goals. It’s specific because it’s designating a certain dollar amount for a specific purpose (emergency fund bucket).
- Measurable: Progress is trackable so you can see how much money you’ve contributed to your emergency fund. In this instance, it would break down to $500 every month.
- Achievable: You’ll be setting aside $500 every month. It is achievable as long as you’re able to put away $500 every month without stretching yourself too thin.
- Relevant: Having an emergency fund is important for a number of reasons. Life happens and while there’s a lot about that you can’t control, setting aside money for an emergency fund is something you CAN control.
- Time-bound: The deadline is 1 year.
4. Pay off $20,000 student loans within 5 years.
- Specific: This is specific as it’s paying off debt, specifically a student loan.
- Measurable: Progress is trackable by seeing how much debt has been paid off.
- Achievable: You’ll be setting aside ~$333 every month to pay off the student loan.
- Relevant: While student loans typically have a long term with an adequate interest rate, it is still in the best interest to pay it off as soon as possible.
- Time-bound: The deadline is set to 5 years.
5. Contribute $6,000 to fully fund Roth IRA within the next year.
- Specific: This is specific as it’s contributing $6,000 to a retirement account, specifically the Roth IRA.
- Measurable: This is measurable because you’re able to track the progress of your retirement account.
- Achievable: You’ll be setting aside $500 every month to contribute to a retirement account.
- Relevant: You’re allowed to contribute a certain amount to your Roth IRA every single year, and contributing to retirement is a relevant financial goal.
- Time-bound: The deadline is set to 1 year. This way, you can max out your Roth IRA every year without even having to really think about it.
These are just a few examples of what you could do utilizing the SMART framework. Remember, you can apply this framework to just about any other goal you’d like to achieve. It doesn’t have to be an emergency fund, retirement account, or debt related. It doesn’t have to be boring!
You could create a goal to save up for a vacation, so you won’t have to stress about how much you can or can’t spend when the time comes. Seriously, this can be applied to just about anything else you’d like to achieve!
Automating…
Another great way to encourage goal progression is to automate. There’s a reason this method is highly recommended, because once you set it and forget about it, you’re still on track with your goals even when you’re not actively thinking about them. Minimizing and removing the activation energy helps with achieving the once seemingly unattainable goal.
What’s even better is logging into your savings and retirement accounts to find a nice nest egg accumulated while you did more important things with your time and attention. On the other side, you can log into your loan accounts to see a chunk of it has been knocked down since you’ve started automating payments. It’s a great way to save more $!
There you have it! Interested in learning more? Check this post out for more goal ideas!
Hey!
Interested in seeing more? Check out our Instagram, Pinterest, and Twitter below!
