By now, you might have a general overview of your year’s resolutions and goals.
Which of these resolutions have you already started working towards achieving and which seem so out of reach that it is discouraging to think about them?
Most people eventually hit a dead end with their new year’s resolutions, especially those that tackle finances. Your goals may seem unattainable after a while and motivation levels decrease considerably.
It’s not easy to set and achieve goals, but it can be done: the SMART way.
The SMART budget planning way
There is a SMART way to set budget goals. This pattern is universal enough that it can be applied to all those big projects that you want to tackle this year.
Let’s take a look at the SMART principle.
Think of specific areas you want to improve or change. The aim is to be as precise as you can. For example, your goal should easily answer the “W” questions: What? Why? Where? Who? Which?
You know you’ve set an achievable goal when you can measure it. If your objective has a clear definition of success, then you can easily track its progress. It will also help you keep your motivation levels high. Win-win.
An assignable goal is one that has a clear picture of your role in it. Make sure you understand what your responsibility is towards this objective being met. You also need to know how others play a part in this goal.
Realistic goals are set within the boundaries of reality. Other synonyms that can help you judge the realistic value of your objectives can be: attainable, achievable, rational, reasonable.
Set your objective within a realistic time frame. Time limiting your goals will help you work consistently towards achieving them. Time can finally be your friend this year!
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SMART practical steps
Any budget planning process can be an overwhelming task for type B personalities (relaxed, laid back people). But the secret to achieving your financial goals lies in breaking big goals into smaller and SMARTer ones.
Before starting to fix something, you need to have a clear picture of what the problem looks like. A clear picture usually means straightforward numbers. You need to know how much income you earn, how many expenses you have and how much money you have left each month.
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Once you have a clear understanding of your finances, you can start working towards achieving your goals.
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This is what a SMART goal looks like
Let’s say one of your biggest budget goals this year is to “become debt free”. This is a great and bold goal, but not a SMART one.
Here’s what a SMART budget planning goala look like:
- Specific: I will pay off all of my debts.
- Measurable: I will pay off all of my debts down to 0% from the current balance.
- Assignable: I am responsible for it. My role is an active one.
- Realistic: This is a realistic, attainable and achievable goal. Others have done it before.
- Time limited: I will pay off all of my debts down to 0% from the current balance by September 2020.
Planning is important, especially when it comes to your financial situation. Life can become chaotic sometimes and it’s easy to lose sight of the goals you set at the beginning of the year.
Remember, it’s never too late to gain control over your budget. Our Shuriken Wealth specialist, Mark Wyld, is ready to assist you with your finance planning for 2017.