You’ve mostly heard about how goals should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. This includes your financial goals as well.
It’s not enough to just set your financial goals; you need to make sure they follow the SMART format to give yourself the best chance for success.
What are SMART goals?
Goals made using the SMART goal-setting framework allow you to measure and track your progress effectively.
SMART goals are:
- Specific. You need to define exactly what you want to do, down to the smallest detail. This helps you direct all your decisions towards this singular goal and helps you better gauge when you’ve reached it. To create a specific goal, think about answering the 4Ws and 1H questions: who, what, when, where, and how.
- Measurable. Your goal needs to be measurable so you know if you are meeting it. Think about numbers when creating your goal.
- Achievable. Make sure you set realistic goals for yourself, or you’ll just be setting yourself up for failure. There’s no point in setting a goal of saving P1 million by the end of the year if it’s already November and you only make P50,000 a month. Make your goal a feasible one.
- Relevant. You want to make a meaningful goal that will change your life for the better. Someone else’s goal in life may not be what’s best for you.
- Time-bound. Give yourself a deadline and stick to it. This prevents you from procrastinating or slacking off.
What are examples of SMART financial goals?
There are many different types of SMART financial goals you can come up with. Here are some examples.
- “By the end of Q3, I will have saved up P60,000 in a savings account, which will be used as my emergency fund.”
- “I will earn an additional P10,000 each month through freelancing beginning next month.”
- “By 35, I will have P10M put away in a bank account for my first home. I will do this by putting away P20,000 each month and investing in UITFs.”
The examples above are better ways of phrasing goals as opposed to just:
- “I will save up money for a rainy day.”
- “I will find a way to earn more money.”
- “I will save up for my first home.”
What should you do with your financial goals?
Once you’ve figured out your financial goals, write them down. This makes it “real” in the sense that you have something physical to hold on to.
Put it somewhere you will always see it, like on your computer desk or planner.
You can also share them with someone you trust, like your partner, especially if your financial goals are tied together. This gives you a sense of accountability and motivates you to keep going.
A final word
The first step to achieving your goals is to set them. Make sure you give yourself the best chance for success by creating financial goals that follow the SMART framework.
Don’t forget to regularly monitor your progress to see how you’re doing and if you need to adjust your strategies along the way.
Let Metrobank be your companion in your journey towards achieving your financial goals. Open a savings account with Metrobank today.
