How to Set SMART Financial Goals

If you’re tired of setting financial goals but never meeting them, it’s time to learn the SMART way. When setting SMART financial goals, you have to make sure they are Specific, Measurable, Achievable, Realistic, and Timed.

What are S.M.A.R.T. Financial Goals?

SMART financial goals are goals you can achieve because they check all the boxes of being an achievable goal.

You’ll be able to set goals that fit within your budget and timeline and are feasible. While it’s great to say ‘I want to be a millionaire by next year,’ we all know that’s not realistic. When you make sure your goals are SMART, they are much more achievable, or in other words, able to become your reality.

How do they Work?

To set SMART goals, you must make sure they meet the following:


This is the what, where, and why of your goal. Get as specific as possible. How much do you want to save? Where will you save it? Why are you saving it? This is the step where you identify everything about the goal including who is involved, who will contribute, or who needs to be aware of your goal.

You could even include accountability partners in your goal so that you have someone to check in with and to be accountable to should you overspend elsewhere and come up short.


You can’t track your timelines or see where you stand with your goal if you don’t measure it. Don’t say, I’ll save $5,000 by next year. Instead, set checkpoints or times when you’ll check in and see how close you are to your goal.

If you have 12 months to save $5,000, then set a checkpoint every 3 months and see if your ¼, ½, and ¾ of the way there at each checkpoint. If you aren’t meeting your checkpoints, revisit your goal. Is it too ambitious? Should you adjust? Were you specific enough when you set out to reach the goal?

Ultimately ask yourself, what’s holding you back from achieving your goal?


We touched on this a little bit, but it’s worth mentioning again. You can dream all you want, but dreams are not true goals.

Achievable goals look different for everyone, but you can spot an achievable and unachievable goal easily even if it’s not for you. Like we said earlier, claiming you’ll be a millionaire in one year isn’t achievable. But saying you’ll save $10,000 in a year may be achievable given your financial situation.


Your goal should be realistic given your budget and lifestyle. It shouldn’t require a major sacrifice that makes you want to drop it after a few weeks or be so hard to achieve that you come up short each time you measure.

Sit down with your budget and decide what realistic looks like for you. If you start trying to achieve your goal and realize you aimed too high, don’t be too proud to bring it back down. Achievement is what matters in the end.


Don’t set open-ended goals. This leaves no closure or urgency to achieve it. Instead, set a timeline. It could be short-term or long-term, you decide. The key is to set up an end goal date along with checkpoints along the way.

With checkpoints, you’ll feel more pressured to make sure you’re reaching your goal. For example, if you set a timeline of 12 months from now, you won’t feel the pressure now to save. But if you know you have a checkpoint in 3 months, the sense of urgency will be there.

Examples of SMART Financial Goals

You can set short-term, mid-term, and long-term goals. Short-term goals are achieved in less than one year, mid-term within 5 years, and long-term in over 5 years.

Here are examples of each.

Short-Term SMART Financial Goals

Short-term goals are those you achieve in less than one year. For example, you set a goal to save $10,000 in one year to buy a car broken down into $833/month.

  • Specific – You know the details of how much you must save when you need it, and why.
  • Measurable – You used numbers so that you can track your progress as you work on achieving your goal.
  • Achievable – You made sure you can afford to save $833 per month.
  • Realistic – You made sure $833 a month to save fits into your budget without too much sacrifice.
  • Timed – You gave yourself one year to save the money.

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Other SMART Financial Goals

You could also set longer-term financial goals depending on your situation and needs. The key is to find goals you can achieve. If you have a long-term goal of saving for a down payment on a house or having $X dollars saved for retirement by a certain age, you are free to set those goals.

The key is to make sure they are achievable and realistic. Longer-term goals are easy to get lost in the shuffle because you forget what you were trying to achieve, especially if you don’t set checkpoints along the way.

Final Thoughts

SMART financial goals help keep you on track. They keep you financially responsible and aware of your goals. Even if you change your goals over time, always keep them SMART. We all know life changes and our priorities change too and that’s okay.

What’s important is that you always set goals for yourself. Without financial goals, it’s easy to spend your money without thinking. We live for the present moment and don’t think about the future. When you set goals, though, you’re constantly thinking about the future and ensuring you have enough money set aside for whatever comes your way. If 2020 taught us anything, it’s that life is unpredictable, so it’s important that we are always ready for what life throws our way.

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