Are you saving money but don’t know where it is for? Are you investing and growing your money but also don’t know where you’re going to use the earnings? Or when you’re going to use them? Relate much? That’s what happen when you don’t have clear financial goals.
It may be hard to accept but the truth is, these are just some of the signs that you missed or lacked financial goals in life. You don’t have a target. You don’t know where you’re going. Let me explain.
Like in any trip you have or like in any shopping you did, it is always important that you know your destination or the things you’re going to buy. If not, there’s a big chance that you will waste more effort and more importantly more TIME.
It’s the same with your finances, you must have clear and smart financial goals. You need to know why you’re paying yourself first. You need to know what’s the reason behind your frugality. You need to know the reason why you want to earn more. The reason why you want to invest. You need to know your target. Your destination.
Why it is important that you have clear and smart financial goals?
As I mentioned earlier, having a clear financial goals will save you time and effort. Additionally, knowing what you are working on will keep you focus and committed. This will keep you motivated and inspired. It is not wise that you are saving hard or investing only to spend it all over again. You need to have clear and smart financial goals!
Like a building being built or a house being created, financial goals are like blueprint which is set and being created before you start the journey. What does it mean? It simply means that you create and laid out plans before you save or invest. You set where it is for. You set date and time. You set how much. And you create plans how you’re going to achieve them. You need to have clear and specific financial goals.
Ok, so now you knew and understood the importance of setting financial goals in life. How do you start and set clear and smart goals? Here are some tips.
Like any other goals in life, financial goals should be specific and detailed. The tips and abbreviation below will provide you some idea how to set smart financial goals in life. Here we go.
S – Specific. What is exactly is your financial goal? What do you want to achieve? Answering these questions will give you the idea of how specific you are to your goal. The more specific the better.
M – Measurable. How much do you need to save or earn? By measuring the amount of money you need to save or invest, you can create specific plans how you are going to achieve that.
A – Attainable. Your goals must be attainable. It means you should be honest to yourself that you are capable of attaining that goals with the plans you are going to create. It is impossible to save P1,000,000 in a month if you’re just earning a minimum wage and only depending on that income. You get this?
R – Realistic. Your financial goals must be realistic too. It means you must set goals that are real. You cannot build a house in the middle of the air. I hope you got what I mean.
T – Time-bound. As mentioned and shared on the previous paragraph, your goal should have a time-line. A clear and specific date and time when you’re going to use or achieve that goal. Put a month, date and year. That’s how smart works.
An example of S.M.A.R.T financial goals are:
- I will save P3,000 every month to build a solid emergency fund of P250,000.
- I will save P5,000 every 15th of the month for my wedding in December 15, 2020.
These are just examples but you can clearly see the difference from an ordinary goal of “I want to buy a car” or “I will save an emergency fund”. See the difference? That’s what we called S.M.A.R.T!
Ok, so I hope by this far you now have the idea of why it is crucial to have smart and clear financial goals. By having this, you have a map where you are heading. Additionally, when you set goals like these, your brain activates millions of neurons and start attracting good vibes for you to find ways how to achieve those goals. It’s true! Try it and see for yourself.
Want to set financial goal while being healthy? Read: Tips How to Save Money The Healthy Way!
Having smart and clear financial goals are just tip of the iceberg. It sets your target and destination, which is only half of the story. The most important thing is taking action.
No matter how smart and clear your goals are, if you didn’t take action – it’s useless. To get results, you need to take action! Commit, work hard and stay focus. Just take one step at a time. With smart goals and endless action, sooner than later you’ll get what you want.
I hope this has been informative. Good luck to your financial freedom journey. Cheers!
About the Author:
This article was written by Billy Ramirez. He’s an I.T, a newly-dad, a blogger and an aspiring entrepreneur. He blogs at Personal Finance Tips and shares basic and fundamentals of financial literacy to every Filipinos all over the world.