SMART Goals: Making Achievable Financial Goals

SMART Goals: Making Achievable Financial Goals

Remember the time last year when you were making New Year’s Resolutions? You probably wanted to shed some pounds, re-organize your routine, or take up new hobbies. You may have also thought about making (or saving) more money and jotted down a financial goal or two.

It’s good to wonder about and question your financial goals from time to time. Goals, whether big or small, short-term or long-term, will set you out to the desired financial path. Maybe you wanted to save up enough down payment for a home in two year’s time or start investing that would run all throughout your retirement years. Or maybe you want to use a good portion of your income saving for specific goals like college and vacation, or you just want to simply live a good life on more generic terms.

When you make goals and aim for them, you also adjust certain habits to make those goals a reality. The best thing about having goals is that you find direction and purpose in every financial decision you make. You want to make decisions that are aligned with your goals and are best for your overall financial interests.

It’s always good to have goals, but that won’t be enough. It’s better to have SMART goals.

What are SMART Goals?

Smart goals refer to goals that are Specific, Measurable, Achievable, Realistic and Time limited. This is a criteria used to make goals easier to track and achieve. This way, it’s easy to direct yourself towards goals that you know are reasonably within reach. You get to use your energy and time effectively towards meaningful results.

SMART goals are commonly used to identify and measure goals in the business setting. In the financial sense, following the SMART method can also be just as beneficial.

SMART Goal Breakdown

The SMART goal is broken down with the following meaning: Specific, Measurable, Achievable, Realistic, Time Limited. Let us inspect each one by one and see how each criterion applies to your own financial goals.


A specific goals refers to a goal in particular. For instance, it is inappropriate to say that the goal is to be rich. Without any benchmark, becoming rich is merely a wish or dream. You need to specify certain perimeters in order to say that you’ve achieved a level of richness. Would you say you want to become $10,000 richer by the end of the year? Or would a new car makes you fee rich? Does it need to be a certain type of car or would any other car do?

If you’re not gunning for “rich,” maybe you could set a goal that would put your lifestyle into “better” or “comfortable” categories. In order to achieve this, you need to define what better is. Would that mean additional income for more delicious food, more shopping and vacation? How much additional do you say you need to live a more comfortable life?

By being more specific with your goals, you also define the “need” in terms of quality and quantity.


The goal should be easy to count and quantify. Place a figure on your goals. If you’ve been wanting to save some money for some time and find that you aren’t saving any at all, it’s probably because there’s no figure next to your goal.

Consider a more measurable goal, like $50 each week. This way, you know exactly how much you expect to save and what your savings will look like given a certain period of time. Instead of being vague about a figure, go ahead and give it a more specific amount. The figure or number you wish to achieve makes it easy to measure your progress and determine if you’re on track with your goals.


All goals are attainable, but when set into the confines of the SMART goals, you’ll realize that certain goals are more achievable than others. In order to make achievable goals, you need to look at your own resources and abilities. For instance, if you wanted to save money, what is more achievable for you:$500 each month or $200 each month?

Now look at your budget to determine which amount is more attainable. You may be able to save $500 each month, but will you still have enough left for basic needs like food and transportation? If not, you need to scale back the goal so you can save money and still be able to meet all your other expenses with no problem.

Another example: say you wanted to go on a vacation with your family. You know you have some travel fund stashed somewhere, but after doing the computations, you found out that you can only a three-night vacation across the state instead of spending one week in the Bahamas. The vacation is achievable, but you need to pick a spot where your budget makes more sense.


A goal remains a wish if it is not possible. Many goals don’t materialize because you’re probably aiming way too high, beyond what you can currently afford. Hence, those goals turn into wishes and dreams and they remain to be that way unless you act on them.

What does a realistic goal look like? For instance, you know you always wanted to go on vacation to Europe. However, since you’re still paying for student loans, just got your first job with basic pay and no real savings to speak of, the European vacation may not be that realistic as of the moment. However, you can take a weekend vacation across the state or to your parent’s home town if logistics are not an issue.

It doesn’t mean that you can never go on that dream vacation, but given your current financial condition and circumstances, you may need to set it aside for a little while until you can afford to.

Time Limited

Your goal needs to have a deadline, otherwise, you’ll just keep pressing on not knowing when to stop. A deadline makes you want to work more and better because you’re up against time. It also helps you stay on track and be able to monitor your progress.

When would you like to make your goal happen? Would you like to be debt-free in X number of months/years or want to save $xxxx by the end of the year? Working against time can be a great motivator to stay on track and make real progress towards your goals.

Prioritize Your Goals

At this point, you probably think that you have a number of financial goals you want to reach, to a point that they overwhelm you. Don’t be guilty. In fact, it’s good to have goals. You know you want something out from life. However, you need to organize your goals in order of importance. This is what we call prioritizing your goals.

In order to get some semblance and order out of your goals, arrange them following a certain order. Consider starting with short-term goals to long-term ones. When you reach a short-term goal, you feel like you’ve achieved a milestone and this will keep you driven to keep reaching your other goals. Long-term goals will take more time to achieve and you may feel like you’re not making any progress if you’re not seeing any form of milestone.

Also consider prioritizing your goals according to urgency. You’ll most likely need to prioritize getting your roof fixed right away in preparation for the rainy season than spend money on a new limited edition bag. In lieu with this, you also need to make sure that “needs” come first before wants. You need to prioritize expenses that are essential for survival. If you have some money leftover, then you can treat yourself for luxuries.


Think about it: SMART goals allow you to be happy today yet secured in the future. You need to have the foresight and prepare for the rest of your life, but you also need to loosen up a little and enjoy life. SMART goals allow you to make concrete, solid and tangible actions in order to map out your life financially according to a specific plan.

Having goals shouldn’t make you feel restricted. Instead, they should empower you more and fuel your desire to become better at handling your finances. You can have the best of both worlds and all it takes is some time of your day or week planning out your finances, revisiting your goals and checking in with your financial progress.