One of the best ways to achieve success in anything–whether it be your career, a new hobby or skill, keeping yourself healthy and fit, and more–is to set goals for yourself. And of course, this holds just as true for your personal finances as it does for anything else. Money goals are what help us grow our wealth, get us out of stressful financial situations, and enjoy our lives without worrying about that next bill.

But setting and achieving financial goals is often easier said than done–and many people quickly find out that without a plan and discipline to back it up, a goal isn’t much more than a wish. So here’s how you can set achievable and beneficial financial goals, then turn around and actually reach them successfully!

1. Envision what success looks like

Talking about goals is the easy part, but figuring out financial goals that you can measure means taking a close look at your personal values, interests, and long-term definition of success. What does a life worth living look like to you? Is success defined by having enough  money that you’re no longer living paycheck to paycheck, or is it defined by having the biggest house, the most expensive car, and keeping up with the Joneses? 

There’s no judgment here–whatever your dreams are, that’s what they are, and nobody’s definition of success is more “correct” than anyone else’s. But you do need to think about this, as your goals will be more meaningful and ultimately more successful if you set them with these values and definitions firmly in mind for the future.

2. Understand your financial situation

Another key part of successful financial goal setting is understanding where you’re starting from. This means knowing exactly how much money you’re making, exactly how much you’re paying in taxes, exactly how much you have in checking, savings, asset value, etc, and at least a rough sense of where your money is going each month.

Ultimately, this helps you set goals that are realistic–saving $1,000 a month is a fantastic goal that will definitely help build long-term wealth and stability, but if your entire monthly paycheck is only $1,200, that goal might not be realistically attainable right now. Having a firm understanding of where your finances are right now will help you determine what goals are plausible and attainable in the short term vs what might be better suited as goals for later steps in your financial journey.

3. Define SMART goals

Okay, you’ve done your preliminary work–now what does a good goal actually look like? Sure, it’s simple to say “my goal is to save more.” And yes, that’s a wonderful and healthy thing to strive for. But that goal also doesn’t really have anything about it that helps you structure a path to meeting it–instead, the best thing you can do is to think of SMART goals. SMART is an acronym that identifies 5 key attributes of effective goal setting:

• Specific: Your goals should be detailed enough so you know what you’re trying to achieve–a goal needs a purpose! Let’s update that goal above from “Save more.” to “Save for a new car.”

• Measurable: Your goal needs to include a specific (often numeric) endpoint–that is, a point at which you know you’ve achieved the goal. So rather than “save for a new car,” our goal will be to “Save $40,000 for a new car.”

• Attainable: Like we talked about above, while dreaming big is fantastic, you want to make sure your goals are something you can realistically achieve. If you’re on a $30K/year income, saving $40K for a new car likely won’t be realistic. Let’s refine that to “Save $5K for a down payment on a new car.”

• Relevant: It’s important to ask yourself if your goal makes sense right now–not just is it achievable, but is it the right thing to be striving for in your current situation? Maybe your car is doing fine, but you’ve got another kid on the way and your 1-bedroom apartment isn’t cutting it. Now our goal will be “Save $5K to move to a bigger apartment.”

• Time-Bound: Lastly, a goal should have a timeline or deadline, as time is a powerful motivator to help us achieve success. If your second kid is due in 8 months, that’s a great way to develop that goal even further to its final (for now) form.

Now you’ve gone from a broad, so-vague-it’s-not-useful goal of “Save more.” to a SMART goal of “Save $5K to move to a bigger apartment within the next 6 months.” It’s realistic, relevant to your needs, and has all the details you need to make sure you know exactly what you’re striving for, when you need to achieve it, and why it’s important.

4. Make a budget–and stick to it

Ah, now here’s the fun part–budgeting. Nobody wants to hear it, but the single biggest step you can take towards meeting your financial goals is to start a budget. Whatever system works for you (a fancy app, old-fashioned envelopes, a detailed spreadsheet, etc), what you need to be doing is tracking every dollar in and every dollar out. Then, you continue by defining where you want your money to go, and finally you do the hard work of actually sticking to that budget through discipline and positive reinforcement. 

5. Track your progress

What’s the point of having a goal if you don’t know when it’s been met? Now that you have your goals and your budget, you need to actually track where you are relative to those goals. Sometimes this is easy–many budgeting apps allow you to set savings goals and will automatically calculate how close you are and what you need to do to get there. Sometimes, it requires a bit of personal willpower. 

But when you can see how every penny gets you closer to your dreams, you begin to feel that motivation to continue. It also gives you a chance to adapt as necessary–if you find that the going is slow and you have room in your budget, you can move your timeline forward and save a little more. If times are tough and you just aren’t staying on track, you can change your goals to something a bit more realistic so you can still feel the “win” rather than feeling like a failure–no matter what, you’re a winner by the sheer fact that you’re putting in the work.

‍

Spotloan: A Smarter Way to Borrow

Goal-setting and budgeting are at the core of personal financial responsibility–but sometimes life happens and personal responsibility isn’t enough to get us what we need. At Spotloan, our simple online application process can help you qualify for the money you need, even if you have bad credit or need a loan quickly. All you have to do is go fill out our application to see if you qualify, and you could receive a decision within minutes. Fill out our application now!