I want to run a 5K in less than 40 minutes by training and improving my eating habits within the next 4 months. That is a very specific goal that is also SMART – specific, measurable, achievable, relevant, and time constrained. You’ll need a goal like that to get on the path to financial freedom.
If you read the previous post, “Start Saving Now, No Really, Like Right Now”, then hopefully you’ve put paying yourself first on auto-pilot. Now that that’s taken care of, it’s time to get specific about your goals.
Do you want to be a millionaire? Multi-millionaire? Debt free? Financially stable? Earning passive income? All of those are a possibility when a clear goal is set and a concrete plan is made to achieve them.
As a single parent, emergencies arise and unexpected expenses are inevitable. However, when goals are in place then put on auto-pilot, achieving them becomes more of an expectation than a dream.
So, what is your goal? Why is it important to you to achieve that goal? Set goals that are meaningful to you based on your values. Avoid keeping up with the Jones’ or trying to meet societal expectations. Its OK to be ambitious and want to have amassed $250K in assets in the next 10 years (everyone likes the million dollar mark, but we’re working with baby steps here.) Or maybe taking a week-long vacation to Hawaii is what you desire the most in the next 3 years. Just remember, set your goals using the SMART goal format, and you’re on your way. (Click here for more on setting SMART goals.)
Now that you are educated on goal setting, it’s time to take action steps.
- Brainstorm what financial goal is most important to you right now.
- Put that goal in SMART goal format.
- Determine how much you will need to save or reduce your spending by, in order to achieve that goal.
- Adjust your finances to achieve that goal.
- If the goal requires saving more, create a separate savings account at your new bank/credit union (see previous post) and put it on auto-pilot.
- Check your goal progress every month to make sure you are on track to achieving it. (You could track it through an app like Mint.)
Voila! All done. Now you’re saving/paying yourself first and setting financial goals. You are well on your way to financial freedom and independence.
What’s your next big financial goal? Post a SMART goal you’ve set in the comments below.
Happy Saving! Live well!