Are you using SMART goals to plan your finances?

Nov 14, 2018 | Tony Byrne's View

The importance of goal planning in all aspects of your life cannot be underestimated, especially since it is something that isn’t taught at school. The problem with lack of goals in your life is that you are directionless, a bit like a boat with no rudder. You could end up anywhere. In my experience most people are like this, which is why most people aren’t truly successful in their lives, especially when it comes to money.

The good news is that clients of ours, reading this blog, can pat themselves on the back. These people are already successful with money, because they are availing themselves of our lifetime cashflow planning service, which is called appropriately Money Forecast.

For those of you out there, who haven’t yet achieved financial success, what can you do about it? Well the first thing to do is to set yourself some financial goals, which must be SMART. So what does the acronym SMART stand for?

Well a SMART goal is one that is as follows:

Specific

Measureable

Achieveable

Relevant

Time-based

A SMART goal is a short statement that a person makes to lead them in the direction of what they want to accomplish. Having goals written in a SMART format ensures that the goal-setter is clear on what they’re trying to accomplish, when and how.

Here is an example of an investing goal:

Invest £500 a month for the first 6 months of 2019 into a Stocks and Shares ISA. If you aren’t ready to invest that much money each month you could even start out by investing £100 a month into one.

When setting the smart financial goal of saving more money, it is important to ensure the goal is specific. So here is an example of a savings goal:

Plan to save £12,000 during 2019 by setting aside £1,000 per month.

This is better than just saying you are going to save more money in 2019. That way you can check on your progress as the year goes on.

Take advantage of your employer’s pension scheme to maximise your free employer contributions into it. If, for example, your employer offers to match your contributions up to 5% of your salary, grab the offer with both hands. It’s free money after all and it is not a taxable benefit in kind! An example of a retirement goal might be as follows:

Contribute 5% of salary each month into the employer’s pension scheme in 2019 in order to maximise the employer’s matching contribution of 5% of salary.

So do you get it?

Set yourself SMART financial goals in order to become financially free one day. If you would like advice on how to set SMART financial goals, why not contact us for a consultation at our expense? You know it makes sense.

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