MONEY HACKS: The SMART Approach to Money Goals

Embarking on a journey to achieve financial goals requires more than just good intentions; it requires a strategic approach. In the latest episode of Money Hacks, we explore the essence of setting SMART goals, a concept that will help you shape the perfect goals for 2024. It delves into the intricacies of SMART goals—goals that are Specific, Measurable, Attainable, Relevant, and Timely or Time-Bound.

Reflecting on the past year's coaching sessions, it's clear that many individuals, families, and retirement plan participants share common aspirations: securing a comfortable retirement, paying down debt, and building various savings for current and future financial needs.

The power of SMART goals lies in their specificity. Take, for example, the clarity of aiming to pay off $10,000 in credit card debt. It's not merely about setting a goal; it's about consistently measuring progress, ensuring attainability, and setting realistic timelines. It's a personalized roadmap to financial success. As we navigate the complexities of financial priorities, adopting the SMART concept becomes a game-changer.

Any money questions you’d like answered? Our Money Hacks series is created from conversations we have with employees, investors, savers, and all people planning for their financial futures. What topics are on your mind for our next episode?

Video Transcript:

Hey, this is Alex Assaley with episode 110 of Money Hacks. It's the week of January 21, 2024. Hopefully, you're still going strong with your New Year's resolutions or the goals that you've set for yourself for the new year. I know that we've got a lot of investors and savers who are participating in our Money Nav Wallet Watch Challenge. It’s a 60-day challenge to help you get on track when it comes to the most important priorities and goals with respect to your financial life and financial picture. And so, part of that I wanted to talk about in today's video is around setting smart goals, specifically with your money.

I know in the last year, in the one-on-one coaching sessions and conversations we've had, a lot of individuals, a lot of families, and retirement plan participants have goals around a few specific areas: increasing and ensuring they're saving enough to get on track for retirement, paying down, paying off debt and liabilities that are creating this drag on their cash flow, and building up other types of savings for financial goals they have today or tomorrow, like emergency savings or goal-based savings accounts for something you're trying to do in the next two or three years, perhaps.

One way to make sure that you can stay accountable for that is to set up a SMART goal. SMART is an acronym that stands for Specific, Measurable, Attainable, Relevant, and Timely or Time-Bound. And so the idea is that when you're thinking about your financial goals if it's to pay down or pay off credit card debt or student loan debt, identify and list out the different components of that SMART goal.

What is the specific goal? Is it to pay off $10,000 in credit card debt? How are you going to measure it? Are you going to, every month, look at your statement, look at your data in a spreadsheet, or perhaps an online financial aggregator like MoneyNav? And then how are you going to set the goal so that it's attainable?

If you're able to pay $100 or $200 or $250 a month towards, let's say, credit card debt or student loan debt, make sure you've kind of laid out the timeline that makes that attainable over a certain period of time. As opposed to saying, I want to get this done in the next six months. If that's not really attainable, it might negatively impact how you're feeling or how you're able to stay on track for that goal if six months from now you're not there and you feel a little disappointed, as an example.

So, we think setting these goals, having a mechanism to measure them, ensuring that they're attainable and relevant to your financial picture, and then setting a time period when you want to reach that goal, all part of that SMART concept are the keys to getting on track, staying on track, and ultimately achieving financial security and financial success.

If you need help with this, we have a ton of resources on our site, moneynav.com. And you can also reach out to our team for one-on-one coaching sessions. Thanks, and see you soon.