Are you setting a goal to “get healthy” in the New Year? How about a goal to save more and spend less? Or maybe a goal to go after that promotion you’ve been eyeballing? The consensus is clear no matter your intentions: most people don’t stick to their New Year’s resolutions. In fact, most new year’s resolutions are abandoned by January 19th .
But why?
It turns out the resolution isn’t the problem; how people try to achieve them is. So, don’t let naysayers talk you out of the big, hairy, audacious goals you have this year. Prove them wrong by setting yourself up for success using SMART goals.
Already fell off the wagon with your resolutions? No problem. Would you stop baking a cake just because you dropped one of the eggs? The turn of a calendar page isn’t the only reason to make plans to better yourself this year. Dust yourself off and establish a plan that will help you hit your targets this year.
What are SMART goals?
SMART is an acronym for Specific, Measurable, Achievable, Realistic, and Timely. A SMART goal is used to help guide goal setting.
S – Specific
Ideals like “get fit” or “save more and spend less” are great starting points for your goals, but they are too vague to be actionable. You have to dig deeper by asking, “How am I going to get fit?” Or “What steps will I take to spend more and save less?”
Do you want to be able to fit in a smaller-size dress outfit? Run a half marathon? Lower your cholesterol? Max out your retirement plan contributions?
These are better goals because they are more specific. And because they are more specific, you’ll have a higher probability of hitting them, especially after you run your goal through the next four SMART steps.
Since paying down debt is something that almost anyone could benefit from, we’ll use paying down student loan debt as the specific example as we move through the anatomy of a SMART goal.
M – Measurable
No matter the goal, it should be easily measured so that you can determine if success or failure has taken place. For example, your goal might be, “This year, you’ll pay off $10,000 in student loan debt.”
Once you have your specific goal in mind, you can start working backward and establishing the metrics to help you reach your goal. Maybe you are disciplined enough to have a monthly metric: I will put “x” toward my student loans each month. If not, you can break it up into smaller increments: I will put “x” toward my student loans each week.
A – Achievable
A good goal pushes you out of your comfort zone but isn’t so unrealistic that you set yourself up for failure before you even start. If you make $10,000 a month, putting $2,500 toward student loans may not be entirely feasible. You want your goal to be achievable enough that you’ll experience some satisfaction with your progress.
Remember, your SMART goals should be achievable but not a “shoe-in.” Achieving the goal will be far more rewarding when it takes some discomfort to get there.
R – Relevant
The most effective goals mean something to us. If you’re just picking a New Year’s goal that looks good on social media, or one that all your friends and family are aiming for, you’re probably not going to stick to it.
So, ask yourself, why? Why do you want to pay off your student loan debt? Why do you want to learn French? Why do you want to max out your IRA contributions? Your “why” should connect to a personal answer that resonates with you, like,”I want to improve my longevity so that I can see my grandchildren grow up,” or, “I want to retire at the same time as my spouse.”
And oftentimes, with new year’s resolutions or financial life plans, the most success comes when we keep our “why” at the forefront of our minds. When times get tough and you feel like breaking your resolution, remember two things: (1) why you started in the first place and (2) if it were easy, everyone would do it.
T – Time-Bound
Have you ever heard the saying, “Spending increases to the income allowed”? Well, it’s similar with goals. A goal that extends indefinitely into the future is going to stay there. Every week, the X’s you mark on your exercise calendar are a timely reminder of your progress, commitment, and the need to stick to your plan. And once you've crossed the finish line and paid down the debt you’ve been chipping away at for months, or you finally are able to fit back into your “skinny jeans,” you’ll feel motivated to set your next SMART goal and keep integrating personal improvement into your regular routine.
What Do Your SMART Goals Look Like?
Do you have any big financial goals for the year ahead? Why are those goals important to you?
Should we incorporate them into your financial life plan?
Sources:
1. https://www.inc.com/jeff-haden/a-study-of-800-million-activities-predicts-most-new-years-resolutions-will-be-abandoned-on-january-19-how-you- cancreate-new-habits-that-actually-stick.html
At Falbo Wealth Management, we hope that you’ll see the beginning of this new year as a perfect opportunity to reset and refresh your personal and financial goals. And we hope you enlist our help to get you there. Here’s to your success in 2023 and beyond! The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
The opinions voiced in this material are for general information only and are not intended to provide specific
advice or recommendations for any individual