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How to Set SMART Financial Goals

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How to Set SMART Financial Goals

Do you know what SMART goals are? You can use the SMART system to reach your financial goals in no time at all. A SMART goal is one that is Specific, Measureable, Attainable, Relevant, and Time-bound. We can learn about how each of these attributes works together to help you set a goal that will help you reach financial success. Let’s learn how to set SMART financial goals

Specific

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The financial goal that you set should be very specific. You can’t just say that you want to save money. How much money do you want to save exactly and what do you want to use it for? Is it for an emergency fund? For a new car? For a down payment on a home? You have to have a very specific goal in mind so that you know what your goal is. 

Measurable

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Your goal must be measurable. You have to be able to see yourself reaching your goal. If you can’t see the amount in your savings account growing, you can’t measure your level of success. If you can’t see how much you owe on your credit card decreasing, you can’t measure that either. Whatever you have decided your goal to be, you must be able to measure your progress as you work toward it. 

Attainable

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The goal you set must have an end-point. If you say you want to “save money” you never know that you have achieved your goal and you will never feel that sense of accomplishment that you have actually reached it. If you set your goal to reach a certain credit score, and you check it each month and you see it climbing, then when you finally check it and you have reached that magic number, you can feel that sense of accomplishment.

Relevant

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If your goal is not relevant to what you, yourself, want to accomplish on your road to financial success, you won’t feel motivated to actually work toward it. Your goal must be something that is relevant to your own needs and wants. If you want that new car but need $5,000 to put down, then that is a goal relevant to you. If you need to pay down a credit card to be able to qualify for a home loan and that is something you want, then that is a goal that is relevant to you.

Time-Bound

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If you don’t give yourself a time limit in which the goal must be completed, you most likely will never get it done. It’s important to set a realistic time limit in which you will reach your financial goal, whether it is to save $500 in 3 months or to pay down your credit card by $200 in 6 months. The time limit should be realistic but should challenge you to get the goal achieved. 

By setting SMART financial goals, you will set yourself on a path to financial success. Remember, you can have more than one SMART financial goal at one time as long as you are realistic about achieving them even though you are challenging yourself. 

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