Charting Your Financial Journey: The Power of SMART Goals
Discover the essential keys to health, freedom, and happiness through your unique financial goals!
In the intricate world of finance, we've explored the importance of the wisdom of financial education, using money as a tool, and the fundamental rule of spending less than you earn. But why does it all matter? The answer lies in your financial goals—personal aspirations that shape your journey towards health, freedom and happiness.
Just as a bodybuilder strives for personal records in weightlifting, you must set financial goals ranging from short to long term. Long-term goals define your ultimate achievements, while short-term goals pave the way to those milestones. This journey demands focus and discipline.
To navigate this path effectively, consider adopting "SMART goals," a framework designed to guide you in setting clear, concise, and achievable objectives.
SMART Goals Breakdown:
Specific:
- Clearly define what you want to achieve. Avoid vague statements. For instance, instead of a generic desire to "learn more about finance," make it specific: "I will read every blog post from DGYAK and follow his actionable items."
Measurable:
Establish criteria to track your progress. For example, transform a generic goal like "I want to save money" into a measurable one: "I want to save $50 per paycheck."
Achievable:
Ensure your goal is realistic. Set challenging yet reachable objectives. Adjust expectations based on your resources. For instance, if you've never saved before, aim for a realistic $250.00 instead of an ambitious $1 million in a month.
Relevant:
Align your goal with your overall objectives. Make it relevant to your life. If the long-term goal is to retire at 65, a relevant short-term goal could be "Complete a financial plan to create a set of financial guidelines to follow."
Timely:
Set a deadline for achieving your goal. Add urgency to stay focused. Make it time-bound. For example, transform a vague goal like "I want to save money" into a time-bound one: "I want to save $1000 in an emergency fund in 6 months."
By applying the SMART goal criteria, you enhance your likelihood of success. This framework provides a structured approach to organize your financial goals, facilitating planning, progress tracking, and the celebration of achievements.
Examples of Long-Term Goals with Short-Term Goals built in:
Long Term: I want to buy a house
Short Term: Get pre-approved for a loan, save 20% for a down payment within the next 2 years
SPECIFIC, MEASURABLE, ACHIEVEABLE, RELEVANT, TIMELY
(Each font style represents the “SMART” acronym)
These examples portray the establishment of profound long-term goals that significantly influence an individual's life. However, achieving these substantial goals requires the completion of personalized short-term goals. The SMART goal framework can be applied to any list of goals, providing a reference so that you DON’T GET YOUR ASSETS KICKED!
ACTIONABLE ITEM: SET “SMART” LONG-TERM GOALS, USE SHORT-TERM GOALS TO ACHIEVE IT
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