What is Goal Setting?
Hey friends! Welcome to our third and final installment of Setting Savings Goals and Achieving them. Today’s post is about goal setting and actually achieving them! What a novel concept! If you missed the first two parts of our series then click below to catch up.
PART ONE – Needs vs. Wants
PART TWO – Making Your Paycheck Last
Part of what we learned while completing Financial Peace University, by Dave Ramsey was goal setting. Yes of course we had goals before-hand. Things like “I want to retire someday” and “Wouldn’t a beautiful farmhouse be nice?” However, we never placed any guidelines of how we were going to get there. Without a plan in place we never hit a savings goal. Honestly, we never even hit a goal to pay down debt.
SMART goals have been around for quite some time. I have known how they work for years but never thought to apply them to my personal life. SMART stands for:
Specific Measurable Actionable Realistic Timely
Each of these components are key to achieving a financial goal. Here is an example:
S – Down Payment for a Farmhouse
M- 20% Savings for Down Payment
A- Monthly Auto-Transfer in the Amount of $500 Each Pay Period
R – Sure is!
T- 3 Years
The best part of this whole process is it works for just about any kind of goal you are looking to accomplish. You can apply it to those New Years Resolutions that always seem impossible. Even those last 10lbs. of baby weight! By taking the time to put a plan in place and writing it down you stand a much better chance of achieving it.
I found using a few different tools helpful over the years. I have had everything from a chart on our refrigerator, to an excel spreadsheet. For me I found a spreadsheet and a separate savings account were the best options. However, if you are a more visual person then something written in a planner or a picture you fill in as you accomplish it may be the better option. Figure out what works for you and stick with it!