Setting S.M.A.R.T Goals for a Happy and Healthy Financial Future

By Andy Collado | Financial Coach | The Financial Clinic

Customers have a wide variety of reasons why they come to me for help: budgeting, improving their credit score, managing their debt, and a variety of other presenting issues. But ultimately they are looking for help in achieving their goals.

Drawing these dreams and aspirations out in color can be difficult. When confronted with adversity, our first response is usually to face the urgency in front of us, but that instinct can blind us to the great planning work we are all capable of. This is why it is extremely important to understand the motivations that push us forward.

  • What will you gain from solidifying your budget?
  • What will a high credit score allow you to do?
  • What is your debt holding you back from achieving?

In this blog post, I will go over how to take a step back from the front line and rise above your present situation to see not only the whole picture but also, that goal on the horizon.

Every journey starts with one step, but first, we need to know where we are going. Whether we notice it or not, we are constantly inundated by people talking about goals. Whether it’s articles, podcasts, top ten lists, social media posts, or even calls from mom comparing you to yet another cousin, the constant barrage of goal talk can make it hard to hone in on what you want, and shift your focus to other people’s goals. And while it is not bad to take inspiration from others, what those goals lack is the personal motivation that comes from aligning your goals with your personal values.

Generally speaking, life can be broken up into eight different categories, based on values: Finance, Material Goods, Community, Family, Spirituality, Health, Career, and Fun. Rank these in order of importance to you, and don’t worry, it is perfectly fine to list fun as first! Then look at them individually, with a critical eye, and gauge your level of satisfaction. Are you 25% satisfied, 50%, or maybe 100%? For those that don’t hit the century mark, ask yourself ‘what would it take make me feel 100% percent satisfied in that area of my life’? Once you have done all of that it’ll be time to get S.M.A.R.T.

Your goals should be:

  • (S)pecific
    You need to eliminate all vagueness by asking yourself, why do I want to do this? Is it because it helps me acquire or achieve something else? Keep going until you get to what you want for its sake alone.
  • (M)easurable
    Make sure you can track your progress, that way you can celebrate when you hit a new milestone!
  • (A)chievable
    We may want to play in the NFL, but if you are a middle-aged man with bad knees, that may not be in the cards for you. Be sure that your goal is possible within your personal situation.
  • (R)elevant
    Your goal must be passionately held and important to you. Hopefully, we have already confirmed this by making sure your goals are aligned with your values.
  • (T)ime Based
    Give it a deadline. When do you want to complete this goal? The deadline can change if need be, but we need one. This helps keep you accountable.

At this point, you have aligned your goals to your values and sent them to school to find themselves. Now we must pause for a second and start moving backward. You have your goal; but how do you get there?  Ask yourself what is the step you will take right before achieving your goal. Then keep going until you get back to where you are today.

Let’s say you want to buy a home, the step before that is finding a home to buy. Before that? Knowing what you can afford. How do you know your price range? You calculate the cost of the mortgage and other housing expenses into your budget. How do you do that? You figure out how much you can put down and get pre-qualified for a mortgage. So on and so forth, until you figure out how much you need to and are able to save per month for the down payment, and what steps you need to take to improve your credit score. By working your way backward from your goal, you are able to lay out all of the steps you need to accomplish to make it happen. Before you know it, you are in the red zone, the last ten yards are just you following the plan that has already been laid out. Throughout this process, it is perfectly normal to not know what the next step is, or how to even begin the research. A financial coach can help you identify those goals, strategize your path, and break everything them down into small manageable chunks so you are not feeling overwhelmed.

By focusing on one step at a time you build the momentum and willpower needed to complete your goal. Each time you complete the process of turning your dreams into technicolor reality it will get easier and you will be that much closer to living your best life. Now’s the time to get to work, find out what matters to you, lay down the plan, and to get it done. You can do it!