Setting SMART Financial Goals | You Don’t Have To Be Brilliant To Be Rich


smart financial goalsWe all want to enjoy a carefree retirement. Money decisions made in our early 20s and 30s can make retirement dreams of traveling full-time a reality or keep us in the workforce longer than we’d like. Smart financial goal setting takes a backseat to everyday expenses like housing, food, daycare, and transportation.

This is on top of the seemingly endless tally of new expenses that make you wonder if there’s a hole in your wallet. The last thing you’re thinking about is retirement, but neglecting it is a bad move that will negatively impact your future self.

Luckily there is a simple way to make smart decisions about your finances whether you are 22 or 52.

Implement the steps we describe here and you’ll no longer have to guess what you should do now to reach your monetary goals.

The Keys To Setting Smart Financial Goals

Organizing Your Financial Milestones And Goals

Smart financial goals begins with an understanding that not all financial targets are created equal. To meet specific financial milestones, separate your short-term goals from your long-term goals.

Short-term goals are usually achieved in less than five years. Common short-term goals include:

  • Paying off credit card debt, personal loans, or vehicle loans
  • Creating an emergency fund of 6 months of living expenses

Long-term goals are more than five years in the future and may include:

  • Funding your child’s education with a 529 plan
  • Saving for a 20% down payment on a home
  • Going on a second honeymoon

When you know the general time-frame of a financial goal, you can breathe a sigh of relief when you realize time is on your side. Even if you find that you need the money for your financial goal sooner than later, you’re still ahead of the game.

You’ll see why in a moment. Now, let’s get SMART about our financial goals.

Importance Of Being SMART

Motivational speakers often say “Goals are dreams with deadlines”. I agree but think we need to take it a few steps further if we want to set smart financial goals for financial planning.

SMART is an acronym that is a financial game changer when implemented consistently.

It not only gives your dreams a deadline, but it makes you get real about what it will take to turn those daydreams into your new reality.

SMART financial goals are:

Specific: They include a clear description, purpose and dollar amount.

Measurable: A measurable goal has a means of tracking progress. Financial goals that can’t be measured stay abstract and hard to reach.

Achievable: It must be realistic but not so easy it becomes meaningless.

Relevant: You must see how achieving the goal will positively impact your life or the lives of people you care about.

Timely: A specific deadline must be defined that signals efforts to accomplish the goal should cease.

Now that you understand what makes up SMART financial goals, let’s take a detailed look at why they work.

Why Smart Financial Goals Work

SMART financial goals work like magic because they are intentional. They remove the vague desire to improve your finances by requiring clarity and specific action to get results. If you’re wondering “That all sounds great, but what does this mean in practical terms?”

Let’s take SMART goal setting for a test ride and learn how this tactic can support any goal.

How would you turn a goal of joining your girlfriends next summer for a healthy living retreat at Red Mountain Resort from an “I wish” to “I’m there”?


I will save $1,000 for the girl’s getaway next July.


I will transfer $100 a month to my vacation fund on the fifth of each month.


I will cut my cable bill by $100 a month by removing premium channels. I’ll use the cash saved for my goal.


I haven’t seen some of my friends in two years, so I’m excited to renew old friendships.


Beginning August 2018, I will transfer money to my vacation fund account to have the trip fully funded by May 2019.

Success Tips For Personal Finance SMART Goals

To help you succeed from the start when setting SMART financial goals to help you reach your financial milestones, here are a few tips that will help you get started and stay on track.

  • State the goal in as few words as possible. But at the same time, make sure it is detailed so it excites you.
  • Once you’ve determined the time-frame for your goal, work backwards to fill in the actions you must take on a monthly, weekly or annual basis.
  • Break long-term or overwhelming goals into manageable, motivating chunks. For example, if retirement is 45 years from now, focus on actions you need to take in the next five years to reach your financial goal.
  • Check in twice a year to congratulate yourself on the progress you’ve made toward achieving your SMART financial goals. Acknowledging success along the way to accomplishing your goals will help keep motivation high.
  • Automate everything. Make deposits without having to decide to do so each month using an auto-transfer option. Even better, have the money pulled from your paycheck before it hits your bank account.

Financial Milestones By Age

Financial professionals recommend that everyone hit certain financial milestones to make sure you experience a worry-free retirement.

Below are the financial milestones you should be achieving by they time you reach 30, 40 and 50 years old.

Use these financial milestones along with SMART financial goals and you will begin to see that you achieve these milestones, which will make your financial future a pleasant one.

Financial Milestones By 30

The financial milestones by 30 allow you to get started with your retirement savings and if you follow through with them, you will have an incredible advantage at reaching your long term goals.

Don’t make the mistake many others do in thinking that you have time to get started and will do so at a later time. The sooner you start, the easier it will be to reach your goals.

Here are some financial milestones by 30 you should strive to reach.

  • One year’s salary saved
  • A good credit score
  • No need to borrow from the Bank of Mom and Dad
  • 3-6 months of living expenses in an emergency fund
  • No debt credit card or personal loan debt

Did I lose you with that last one? The reason you want to clear out that type of debt is that it will allow more funds to be put towards your SMART financial goals, especially since income will likely increase as you advance in your career.

Here’s what a SMART financial goal for a 30 year old might look like:


I will pay off my $5,000 credit card bill by working a side hustle


I will pay an extra $300 a month to my credit card on the fifth of each month


I will earn $300 a month from a side hustle


After my credit card debt is paid off, I can use the money saved for (fill-in-the-blank financial goal)


Beginning January 2019, I will pay an extra $300 a month to my credit card debt for a final payoff in (month year)

Financial Milestones By 40

As you reach your 40’s your finances should begin to turn. With your consumer debt gone, you are saving and investing more of your money. This will allow you to grow your wealth faster.

But having a family will impact your finances too. You will now begin thinking about not only your finances, but also saving for you children’s education.

While life can be overwhelming here, don’t let your finances take a back seat.

Here are some financial milestones by 40 you should strive to reach.

  • Focus on maximizing earnings
  • Max out your retirement contributions
  • Have life insurance in place or review your current plan and make adjustments
  • Evaluate the performance of all investment accounts and make changes as needed
  • Be debt free except for your mortgage
  • Have a fully or partially funded education savings account for your kids
  • Have a will
  • Have a life insurance policy, assuming someone is dependent on your income

You want to hit these financial milestones during this time since there is greater opportunity to impact your financial goals. Earnings should be at an all-time high during this time.

Here’s what a SMART financial goal for a 40 year old might look like:


I will add an extra $1,200 to my child’s 529 Plan over the next 12 months.


I will set an automatic transfer of $100 from my checking account to the 529 Plan to occur on the fifth of each month.


I will use my raise at work to fund the extra deposits to the 529 Plan.


I want my child to take out as few loans as possible to fund her education.


I will set up an automatic bank account transfer of $100 from my checking account to the 529 Plan beginning February 2019 and ending February 2020.

Financial Milestones By 50

Your finances in your 40’s see yet more change. Your earnings from your career should reach their peak and it is now time to get more serious about creating detailed plans for retirement.

Here are some financial milestones by 50 you should strive to reach.

  • Have five times your salary saved or invested
  • Ramp up savings during this time
  • Continue to maximize employer-sponsored retirement matching plans, and other retirement accounts
  • Should be debt-free including your mortgage
  • Re-evaluate your investment strategy based on results and market conditions
  • Continue to downsize expenses
  • Spend like you are already retired

Notice a shift in these financial milestones? As you approach retirement age, the emphasis on saving more is coupled with a re-assessment and reduction in your investment risk tolerance.

Certain types of investment vehicles, such as stocks, will begin to make up a smaller portion of your investment portfolio since you will now have less time to recover from market volatility.

Here’s what a SMART financial goal for a 50-year old might look like:


I will add $2,400 to my retirement account over the next 12 months.


I will transfer $200 a month to my retirement account on the fifth of each month.


I will cut my cable bill by $100 a month by removing premium channels. I will downgrade my cellphone plan which will result in an extra $50 in my monthly budget. Since I normally spend $25 each time I eat out, I will eat out two fewer times per month.

I’ll use the money saved for my goal.


A comfortable retirement is more important than my watching re-runs of Game of Thrones, unlimited data plans and eating out.


Set up an automatic bank transfer of $175 from my checking account to my Roth IRA.

Wrapping Up

You don’t have to be brilliant to be rich. You only need to set SMART financial goals. It takes planning and action to put you on the right track towards achieving any goal.

Use the steps presented here to reduce financial stress and improve confidence in your ability to live the life of your dreams.

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