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DM 79 - Financial Mastery - 5 Tips to S.M.A.R.T. Goals



What's a S.M.A.R.T. Financial Goal? Hey, it's Jon from Financial MD, welcome to today's Didactic Minute.

 

Now I'm not implying that your financial goals are stupid. They might be, but I'm not implying that. A S.M.A.R.T Financial Goal is just an acronym like you use in medicine; like we use in finance – QCDs, RMDs, IRAs, etc. – that's an acronym, sort of, or an abbreviation. But a S.M.A.R.T. Financial Goal is really making sure that you've put together a good goal that you can succeed at, and how to do it is to take these five tips on how to make that goal a reality.

 

Number one, it's got to be SPECIFIC. So it can't be vague. Something like, "I want to get better at money this year." That's good, but not something that's really specific that you can see how you're doing, which takes us to the M which is MEASURABLE. Is it something you can actually measure on a regular basis? You may say, "I want to get out of debt." Great – that's specific. But if you can't really measure it, you don't know how much debt you have, you can't get into any of your accounts and see or track your progress on a regular basis, then that's not measurable. So get something that's specific, that's measurable. Get something that's ACHIEVABLE for you. You may say, "I want to get $150,000 of debt paid off this year." Okay, that's specific, that's measurable, but you make $70,000 as a fellow, so probably not super achievable unless you're knocking off banks or winning a lottery which I wouldn't recommend either. So specific, measurable, achievable, and RELEVANT – that's the R. It's got to be something that applies to you that you can get passionate about that actually falls in your life. You and your family could actually do, that you love, that you would be motivated by all throughout the year. So something relevant. And lastly, something TIME-SENSITIVE. Something that is going to give you an idea of when a deadline is a framework, a timeframe. Something that says I've got to get it done by this because getting out of debt, knowing how much you have, it's achievable, it's trackable, but you've got until forever to do it, that's probably not going to happen – at least not in any kind of timeframe that actually benefits you financially.

 

And so keep track of those five things when you're making your financial goals.

 

Is a financial goal a good idea? Absolutely. Resolutions – whatever you want to do. But make sure it fits within those five criteria. You can put a checkmark in all those boxes and that's going to greatly increase your likelihood for success.

 

So comment below. I'd love to see what your goal might be and it can also just help you to comment to declare it publicly, there is psychology behind the fact that if we say something out in front of people whether just putting it out into the universe, speaking it, or having other people say, "Hey, you said this," it does kind of help us push a little bit harder to make that thing happen. Or if you need a goal or if you want to just talk about it, throw it in the comments. We love having these conversations. I'd love to chime in and help if I can. Otherwise, share this with somebody who you think needs to see it, or just throw it out there and see who else needs to benefit from a S.M.A.R.T. Financial Goal this year.

 

Again, it's Jon from Financial MD, we'll see you next time.




 

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