Traveling the world. Scaling a business. Achieving financial independence. Do you ever sit and wonder how some people can achieve huge milestones like these? It’s no accident or coincidence that these things happen for them, especially since they’re no different than you or anyone else for that matter.
They do just do one thing differently, they set SMART financial goals. High performers create a plan, hold themselves accountable to their plan, don’t make excuses, and achieve what they set out to. And the good news is you can learn how to do it, too!
There is a difference between a regular goal and a SMART one and the difference lies in the details. It is not enough to say that you want to increase your net worth or save more money. You need to figure out what exactly that means to you. And you do that by setting SMART financial goals.
SMART financial goals have 5 key parts. They are Specific, Measurable, Attainable, Relevant, and Timely.
A specific goal focuses on an exact outcome. The more details you provide on the result, the easier it will be to recognize when you have achieved it. Get specific by answering the following:
Specific goals have a greater chance of achievement.
The second part of a SMART goal is that it’s measurable. This is the exact number or event that you are striving to achieve.
Nearly all financial goals are tied to a dollar amount in one way or another. This makes it easy to monitor your progress towards the objective. It also helps show where you are, what you’ve already accomplished, and how much further you have to go.
The next element is that your goal should be attainable. Smart financial goals need to challenge and push you outside your comfort zone. It should make you feel a little uneasy about being able to achieve it. The outcome is unknown and this uncertainty will help you stay focused. And motivated to work towards its achievement.
Dream a little and stretch yourself into doing something big and impactful!
Also, be aware of and avoid small goals. These tend to be predictable or achievable with little to no effort. They are not goals since the outcome is already known or likely.
The trick is to find balance. Set a SMART goal that will stretch you outside of your perceived limits. But, don’t set one that appears so daunting that it prohibits you from even getting started.
Also, make sure you have or know where to get the resources you will need to achieve the goal.
The fourth part of setting a SMART financial goal is making sure it’s relevant. What is the point of pursuing a goal if it doesn’t matter to you?
This step is all about exploring what you want and why you want it. A few questions to consider are:
Getting clear on ‘why’ you want the goal will help you stick with it when you run into obstacles.
When I set my goal of financial independence, I was focused on living on my terms. I wanted to have unique experiences, deep relationships, and ultimately be able to help others live their dreams. When faced with challenges along my journey, I always came back to my ‘why.’ The strong connection I had with it kept me on track and moving forward during the difficult times.
The final component is that it must be time-based. It is not enough to simply say you will do something someday. In my experience, someday never comes. If this goal is something you actually want to achieve and makes your life better; wouldn’t you want it sooner, rather than later?
You need a deadline, a date to focus on achieving the goal by. The target date needs to be realistic, but also something that motivates you. So you will stay focused and work diligently towards the outcome.
Once you have finalized your SMART financial goals, sign up for Notes from the Universe. This is a FREE email that gets sent out on weekdays. The Universe will give you powerful and encouraging messages along the path to your financial dreams.
Everyone has dreams and aspirations. And any goal can be intimidating when you stop and think about where you are now and how far you have to go to achieve it.
Once you have set a SMART goal, it’s time to come up with an action plan. What are the steps you need to take to achieve the result?
Breaking down a goal down into smaller mini-goals makes it much easier to develop a plan. The smaller these goals get broken down, the easier it is to measure your progress towards the main bigger goal. It also won’t be as overwhelming when you start and progress forward either.
For example, let’s assume that you want to save $10,000 in two years. Consider each of the following:
The discipline of saving $13.70 a day sounds a lot easier than just saving $10,000 flat out. Also, it gives a plan on how to achieve the bigger financial goal through the mini-goals that have been set.
Mini goals are useful. They serve as checkpoints along the journey to your larger ones. Even if you slip up on your daily goal, you still have time to take corrective action. Thus ensuring you hit the weekly or monthly goal.
I am sure once you start working towards your goal you will realize it isn’t as difficult as you first thought.
It is not enough to simply set goals and break them down into mini ones. It also requires a little bit of time and energy to assess your progress along the way. Reviewing your goals, at least weekly, keeps them front of mind and in your focus. The more you read them, the quicker they will become ingrained in your subconscious mind. And will become a part of your daily habits.
Personally, I print out all my goals and post them on my bathroom mirror. This forces me to engage with them at least twice a day while I brush and floss. (I hope my dentist sees this post!)
In Grant Cardone’s book, The 10X Rule, he suggests that you 10X your goal. If you want to save $1,000, why not save $10,000? The work to achieve it is pretty much the same and in the end you will have achieved more. And remember the quote by Vincent Peale, “Shoot for the moon. Even if you miss, you’ll still land among the stars.”
It can feel risky to set goals and challenge yourself. However, you will find it isn’t that scary once you take the first step. The key is to set a SMART financial goal, create an action plan, and then you must take the first step.
“If you want something you’ve never had, you must be willing to do something you’ve never done.” -Thomas Jefferson
What are your SMART financial goals? Comment below
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