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Monday Messages

Are You Being Financially S.M.A.R.T?

We've all heard about the benefits of setting financial goals. They help you stay focused on saving, help keep your finances organized, and are an important part of YOU becoming financially secure. But, we don't hear as much is about how many people never achieve their goals. Why is that? After all, setting and meeting goals is so important to our financial health. The answer is simple - changing your financial habits is hard! Fortunately, being S.M.A.R.T about your financial goals can make sticking with your goals easier.

Be S.M.A.R.T

The first step in meeting your financial goals is to set them. This means that your goals should be Specific, Measurable, Achievable, Relevant, and Time Based. That’s the S.M.A.R.T method, which can be very helpful.

• Specific

Your goal has to be specific, not generic or vague. Be clear on what you want to accomplish and ask yourself how this goal will put you in a better financial situation. You can't get what you want if you don't know what you want. What are you saving for? How much money will you need? What is your plan once you have saved the money? All these questions need to be answered to make your goal specific.

• Measurable

Make your financial goal measurable by quantifying it so you can evaluate your progress and overall success. Express your goals in clear numbers, so you'll know where you are and when you've succeeded. For example – If your goal is to save $100 a month, break it down even further and plan to put away $25 a week. This will help you stay organized and quickly identify when you could not meet your goal.

• Achievable 

One of the biggest obstacles to achieving a goal is setting your expectations too high. The surest way to improve your financial situation is to take achievable steps. If that means taking smaller steps, that's ok. You can always set a new goal! Ask yourself if your goal is possible given your current budget and financial situation. If it's not entirely realistic, you can lower the amount you plan on saving or focus on another area of your finances.

• Realistic 

When setting the goal, assess the steps you plan to take to achieve the goal. Ask yourself if those steps are realistic given your current circumstances. Setting unrealistic goals usually leads to disappointment and giving up. Let’s say your goal is to purchase a new car in a year. Before you go ahead with the planning, double-check that you actually need a new car, or are there other things you should be saving up for first? Your financial goals should always be beneficial and necessary!

• Time-Based

Give yourself a time frame to achieve this goal. This will encourage you to follow through, stop procrastinating, and keep yourself accountable. Determine a clear and realistic timeline to complete your goal. This will help you with procrastination and keep you focused.

Example of a S.M.A.R.T Financial Goal:

Paying off Your Credit Card Debt - If you’ve accumulated credit card debt, you can pay it off using the S.M.A.R.T. formula.

Specific- Your specific goal is to pay off your high-interest credit card debt in full in less than 1 year.
Measurable - How much money do you owe on your credit card? This figure (for example $2,000) will make your goal measurable.
Your measurable goal is now to pay off your $2,000 credit card debt in full in less than 1 year.
Achievable - To achieve this, you will need to take actionable steps that will help you track your progress.
Your achievable goal is to pay off your $2,000 debt, you will put $200 plus interest every month towards your credit card. You will also stop using it temporarily to avoid accumulating additional debt.
Realistic - What steps can you take to achieve your goal? Can you cut out some entertainment expenses and stop using your credit card?
Your realistic goal is to cut back and use that $200 to pay down your credit card every month.
Time-based- By applying $200/month plus interest towards your debt, you will achieve your goal in 10 months - two months earlier than your 1-year goal.
Your S.M.A.R.T. financial goal is:
I will pay off my $2,000 credit card debt in 10 months by putting $200/month (plus interest) towards it. I will achieve this by cutting my entertainment budget and not using my card during this time.

Getting Started

Do you have any S.M.A.R.T. financial goals you want to accomplish this year? Start writing them down, take actionable steps and keep track of your progress. Additionally, you can work with WyHy to start saving and achieving your goals!

We’re with you!