Setting SMART Financial Goals
Financial responsibility is an essential skill that everyone should learn, regardless of age. Whether you want to save for a new video game or a new outfit, SMART financial goals are an effective approach.
What are SMART financial goals?
SMART is an acronym for Specific, Measurable, Achievable, Relevant, and Timely. Using these criteria when setting financial goals can help ensure that they are focused and easier to achieve.
- Specific: Being specific means clearly identifying what you want to achieve. Instead of saying, I want to save money, say, I want to save $50 for a new video game.
- Measurable: Having measurable goals means setting targets that you can track and quantify. It allows you to see how far you've come while encouraging you to keep going. For instance, track the progress of your savings by saying, I will save $5 each week for ten weeks.
- Achievable: Goals should be realistic and attainable. Set goals that challenge you, but remember to consider factors like your income, expenses, and time frame. If saving $5 per week seems daunting, modify your goal to a more achievable amount while maintaining the challenge.
- Relevant: Goals should be relevant to your life and interests. If you love a particular hobby or have been eyeing a new game, setting a financial goal related to that interest can make the process more enjoyable. It also makes it easier to be motivated to stick to your financial plan.
- Timely: A goal needs a timeline to help track progress and maintain focus. Instead of saying, I will save for a new video game, say, I will save $5 each week for 10 weeks to buy the game by the end of the summer.
Tips for setting SMART financial goals:
- Break it down: Divide your main financial goal into smaller, manageable steps. For example, if your goal is to save $100, set milestones of $25 or $50 along the way.
- Track progress: Regularly monitor your savings, expenses, and progress towards your goal. Use a journal, spreadsheet, or even a money-saving app to stay organized.
- Seek support: Discuss your goals with your parents or guardians, as they can provide guidance and support throughout your financial journey.
Remember, everyone starts small, and with determination and consistency, you can achieve any financial goal you set your mind to. Happy saving!