The Best Way To Set Money Goals (And Achieve Them) Part 1


An Intention such as “I want to grow my income”, “I want to clear all my debts” or “I want to be financially free by the end of July” is surely going to fail by the end of December 2021. That’s because they depend on willpower for achievement, which is one of the cardinal sins of Goal setting. 

If you’re like most people, you’ve probably failed at sticking to a monthly budget, completing that savings to buy your dream house, or not investing when you promised yourself you’re going to start. 

You’re not the problem. You simply need to change your approach. In today’s post you will learn a proven method to pursuing your financial goals. Hopefully, at the end of 2021, you will write us an email with testimonials of how this technique has helped you. 

What Really Is A SMART goal? 

SMART goals are the cure for vague or aimless resolutions such as:

“I want to be rich.”

“I want to read more financial books.”

“I want to start investing.” 

They might seem like Goals but there are simply Good Intentions. Instead, a SMART goal is so REAL that it says, “I want to start investing in Mutual Funds with 5k.” 

Setting Goals the SMART way

1). Be Specific

What specific outcome do you want to see when the goal is accomplished? 

What will this goal achieve? What will happen if it is accomplished? 

The more specific answers you give, the better clarity you receive, and you can focus your mind on achieving.

Therefore, don’t say: “I want to be rich” 

Say: “I want to start and grow a business that will give me X amount of money.”

2). Make Sure You Can Measure The Outcome

How will you know you’re making progress towards your goal? 

So let’s say Fumbi decides she wants to “read more books on finance in the coming year”. 

What is “more”? How do you define it? 

She picks one book the first week in January and completes it by the third. Then she picks a second one and discovers it’s not as enlightening as the first. Because she had promised herself to ‘read more books’, she will do whatever it takes to complete this second book. 

She is sure to repeat this cycle and by the end of the first quarter she’s uncertain how many ‘more’ she needs to read for her to mark her goal as accomplished. Do you also see how she’s relying on willpower to accomplish her goal? 

Having measurables attached to your goals allows you to track them and see how you’re making progress. This is crucial psychologically for achieving your goals, and can keep you motivated to see it through.

Therefore, instead of trying to read more books on finance, strive to finish one every week. By the end of the money, you’ve read four books and then test your financial skills. 

3. Be Realistic

Being unrealistic is a problem with many ambitious people. It’s okay to think big and be bold, but you and I have a limit to what we can achieve as individuals. 

For example, it’s realistic for an employee who has a Business or Side Hustle to set a goal of $1,000 every month than for his colleague who only depends on his salary. 

So think about your own goal. Is it realistic for you? Do you have the skills and knowledge to accomplish your goal? If you don’t, can you easily get those skills?

4. Have a Deadline

“I want to earn an extra $1,000 a month from my side hustle within six months.”

“I want to save X amount before May 2021 so I can travel to Canada for Summer.”

These are examples of goals that get accomplished. 

Why? Because they have deadlines.  

A Time-oriented goal will help you stay focused and motivated to achieve your goal. So ask yourself: What’s the deadline for your goal? Will you know in a few days, weeks, or months if you’re on the right track? 

With this framework, you can turn any lofty Financial or Career goal into something you start taking action on immediately. For your goal to be SMART, it needs to be Specific, Measurable, Action-Oriented, Realistic and have a Time frame. Once you’ve set SMART goals, it’s easy to follow through and actually achieve them through Habits. 

How do you build good Habits that support you towards achieving your important goals? To make sure you don’t miss the answer in our next post sign up with your name and email below.

1 Comment

  1. Adenike Omolara Sonuga
    December 9, 2020 @ 11:02 pm

    This is very helpful guide to setting smart goals especially as it pertains to finance.

    I will definately change my approach to setting money goals
    Thank you

    Reply

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