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If your New Year’s resolutions for 2023 go past existence in survival mode, I’m willing to bet you have a financial goal in there somewhere. And this is good, as it shows you’re thinking beyond the present and preparing for a time in the future when life feels a little less restricted.
The unique thing about financial goals is that they spill over into many other “goal” areas of your life. Want to retire early? Look at your finances. Own a boat in the next five years? Finances. Travel the world? Finances.
In order to be successful in these other areas of your life, you will need to focus on your financial health.
That said, it’s critical to determine how you define success in order to create your financial goals. What do you see when you visualize your ideal future, and how can you organize your money in a way that will help you move in that direction? Once you know where you’re trying to go, you can start creating personal financial objectives that will support your other long-term goals.
What do you want to ultimately accomplish? Do you want to get out of the professional arena at a young age and spend the rest of your days seeing the world? If so, you better focus on saving as much as you can and setting your retirement money up in a way that will make it grow on its own. Or, do you want to live a simple life and retire to your family-owned cottage in the mountains with your spouse? If so, you may not need to push yourself to save as much as immediately as you would in scenario #1.
No matter what, if you’re ultimately trying to live an intentional life with your loved ones, this will be hard to accomplish without some type of financial security.
Whatever your goals are in life–both short- and long-term–think about how you will finance them. Without intentionally setting your financial trajectory, you may never be able to conquer the other things in life that you want to achieve.
If you want to establish a secure financial situation for yourself, you first must understand that the health of your finances should not be taken lightly. Staying on top of your fiscal matters is a critical first step in living independently. So don’t jump on board with the 92% of resolutioners who don’t reach their goals. Instead, make your goals SMART so your success will be essentially guaranteed.
In this article, we are going to look at 9 examples of personal SMART goals you can use to help increase your net worth. But first, let’s look more at what SMART goals are and how they can guide you in a direction toward success.
What Is a SMART Goal?
The SMART acronym outlines the five characteristics that every well-written goal statement should include. When you apply this framework to your goals, you will be able to recognize if any of your goals are out of reach or if you could push yourself a bit more. You will also be able to see what steps you need to take before you start to work on your goals so you’re not setting yourself up to fail.
S = Specific
When creating your financial goals, you need to be very precise about what you want to ultimately achieve. This first step acts as your mission statement for your goal. Consider the following:
There will be no question as to whether or not you achieved your goal if it’s specific enough.
M = Measurable
When your goal is measurable, you will be able to determine your progress every step of the way. One trick to figuring out if your goal is measurable is to ask yourself what your half-way point is. If your goal is to save a lot of money, you can’t tell when you’re half-way there because the goal isn’t measurable.
What metrics will you use to determine your progress? If you have a savings goal that will take six months to achieve, set a milestone to reach at each month to keep yourself motivated and to make sure you’re making proper progress along the way. This way, if you reach month 4 and you haven’t saved a dime, you will know it’s time to revisit your goal.
A = Achievable
Do you have all of the tools and skills you need to achieve your goal? Is there another goal you need to meet first? You don’t want to create a goal of saving $500 per month if you only have $200 of disposable income after all of your bills are paid–that’s not achievable.
Your goal should require you to step outside of your comfort zone, but it should not be impossible.
R = Relevant
This is where your Why comes in. Your SMART goals need to be relevant to your long-term vision in order to motivate you.
Attach a reason to each of your goals, such as: I will save $100 out of every paycheck so I can…
…or whatever it may be that is prompting you to save money. If your goal isn’t relevant, you’re not likely to stick with it if you hit an obstacle.
A 2019 study found that making an emotional connection to a financial goal can help boost motivation. For example, if your goal is to pay off debt so you can put money into your child’s college fund each month, keeping a picture of your child next to your credit card can help you think twice before making unnecessary purchases, therefore protecting your progress toward your goal. The researchers found that seeing something that is more important than the imminent purchase (such as a picture of your child) can override one’s natural impulse to buy new things.
T = Time-Bound
It isn't effective to create a goal and say you will accomplish it someday. Think about all of the things you’ve promised yourself you will do someday. I know my garage is still waiting to be organized, I haven’t crossed the finish line of a triathlon, and that old friend I ran into a year ago is still waiting for us to set up a lunch date. These are all things I was going to do someday.
There should be a specified deadline for your goal to put some pressure on you to get to work. Having a target date is critical–and it’s good to know what your half-way point is also. This will give you a sense of urgency, and it will give you some extra motivation in case you need it.
How to Start Setting SMART Personal Financial Goals
You can only set your personal financial goals once you know what your future needs and aspirations are. From there, it’s relatively easy to put financial goals into the SMART goal format because you’re working with definite numbers and not just ideas or feelings that can be hard to measure. This makes it easy to track your progress and know if you have achieved your goal.
You can set SMART goals for your short- mid- and long-term financial goals. Start by writing down things that you (and your family) may want to do or buy in the future–no matter how reasonable it seems. You can prioritize and weed out some ideas later, but first, just do some brainstorming.
You likely won’t be able to complete all of the goals that you list, so it’s important to be able to prioritize it.
What do you want your life to look like in 20 years? What does success mean to you and what does it entail? Living in a paid off home? Retiring at 50? Buying a second home? Traveling the world?
Based on where you are now, where do you want to be in three to five years? What are some things you want to accomplish? Build an emergency fund of six months’ of expenses? Pay off a large debt? Save up for a down payment on a house? Get a degree?
Think about the plans you have for the upcoming year and anything new you would like to start. Do you want to go on vacation this summer? Buy a new washer/dryer? Take a class? Pay off a store credit card?
You can create a firm savings plan for each of the financial goals that you’ve come up with by reassessing your spending habits and prioritizing what you do with your disposable income.
Now, let’s look at 9 examples of SMART goals that you can use to increase your net worth.
15 SMART Personal Financial Goals to Increase Your Net Worth
1. Eliminate Credit Card Debt
“I will pay off my $2,400 credit card balance within six months to avoid being charged any interest by only drinking coffee from home and picking up an extra shift at my part-time job in order to put $400 per month toward the bill.”
S: To pay a $2,400 credit card balance to $0.
M: Pay $400 per month for six months.
A: This is an attainable and reasonable goal.
R: While financing something and spreading out payment into monthly installments, no one wants to pay extra for interest, which makes this goal relevant.
T: The deadline for this goal is in six months.
2. Build an Emergency Fund
“I will build an emergency fund by putting aside six months’ worth of expenses within the next year. I will start this fund by decluttering my home and having a yard sale and I will continue to add to it with the income I will earn from a second job. This way, I won’t need to worry about a financial emergency.”
S: To build an emergency fund
M: Put aside six months’ worth of income within one year
A: This is an attainable goal for anyone who is motivated to live without looming financial troubles.
R: This goal is relevant to anyone.
T: The deadline for this goal is in one year.
3. Invest in Index Funds
“I will save $3,000 to make an initial investment in an index fund that has an expense ratio of 0.5% within the next four months. I will then set up automatic contributions of $50 per paycheck in order to diversify my savings. I will do this by holding off on my other savings for the four months I’m saving up for the index fund.”
S: To save $3,000 to put into an index fund.
M: Open an index fund with $3,000 in the next four months.
A: This is an attainable goal and can be adjusted for one’s individual savings abilities.
R: This is a relevant goal for anyone who wants to save long-term.
T: The deadline for this goal is in four months.
4. Save for Retirement
“This month, I will set up my 401K through my employer with a contribution of 6% of my salary. I will do this in order to maximize my company’s matching policy .”
S: To put 6% of one’s salary into a 401K.
M: Open a 401K plan by the end of the month.
A: This is an attainable goal for those who work for a company who offer a matching policy for retirement funds.
R: This is a relevant goal for anyone who is saving for retirement.
T: The deadline for this goal is at the end of the month.
5. Make More Money
“I will secure a second source of income through a part-time job by April 30 in order to increase my monthly savings by $500 per month.”
S: To get a part-time job to be able to save an additional $500/month.
M: Get a job by April 30 to put $500/month more into savings.
A: This is an attainable goal and can be adjusted as needed.
R: This is a relevant goal for anyone who wants to save money.
T: The deadline for this goal is April 30.
“I will refinance my home within 90 days in order to take advantage of the current lower interest rates and reduce my monthly mortgage payment.”
S: To save money on interest by refinancing a mortgage.
M: This will be done in the next 90 days.
A: This is an attainable goal for homeowners.
R: This is a relevant goal for people who are paying a mortgage.
T: The deadline for this goal is in 90 days.
7. Gain Financial Education
“I will read at least six personal finance books this year to improve my knowledge about saving money and learn about any missed opportunities that I can take advantage of.”
S: To read six books on personal finance by the end of the year.
M: Read six books in 12 months.
A: This is an attainable goal and can be adjusted for one’s individual wants or needs.
R: This is a relevant goal for anyone who has a personal interest in their money.
T: The deadline for this goal is the end of the year.
8. Own Your Home
“I will make two mortgage payments per month for the remainder of this year in order to pay down the principal and be free and clear of my loan within 8 to 11 years.”
S: To pay down the principal of the mortgage by making two payments per month.
M: Make an extra payment at least twelve times (one extra per month during the year).
A: This is an attainable goal for those who have the extra income and want to make this a priority.
R: This is a relevant goal for anyone who owns a home.
T: The deadline for this goal is at the end of each month and at the end of the year.
9. Protect Your Assets
“I will buy enough disability insurance by January 31 to replace my income, should an incident occur that prevents me from working.”
S: To sign up for/buy disability insurance.
M: Enough to cover one’s income, which will vary.
A: This is an attainable goal for anyone who is working.
R: This is a relevant goal for anyone who depends on their full-time income to live.
T: The deadline for this goal is January 30.
10. Find a financial accountability partner
“In the next week, I will ask someone to be my financial ability partner. Then, I will establish a monthly meeting time for one year with them to discuss financial matters with them.”
S: This goal requires establishing a relationship with a financial accountability partner. To do this, you have to think about the people you know and ask someone to be your financial accountability partner. Then, you need to set up a monthly meeting time with them.
M: You will have achieved this goal when you have established a monthly meeting schedule with your financial accountability partner.
A: To achieve this goal, you'll first have to accept that personal growth requires help. This even applies to financial growth. Having someone to help you achieve your goals is achievable if you’re willing to ask for help.
R: Having an accountability partner keeps you on track. They can help you think through your goals and achieve them. Also, they can help you see when you're missing the mark, too. Therefore, you need to choose someone that will be honest with you.
T: A week is plenty of time to think through your relationships to determine who would be a good fit. Also, it gives you time to ask them. As for monthly meetings, that's enough time to discuss financial matters. Finally, a year provides plenty of time for change.
11. Create a “No-Spend Month”
“In the next six months, I will designate one month as a “no-spend month”. During this month, I will not create any unnecessary spending.”
S: The key to this goal is the term “unnecessary” when it comes to spending. Necessary spending refers to the things you spend money on every month, such as utilities, mortgage, and groceries. Therefore, unnecessary spending refers to things like excessively ordering takeout.
M: This goal is easily measurable. You know you've achieved it when you compare your monthly expenses to your list of required expenses. If they match, then you've met your goal.
A: This goal will require willpower. You can achieve it if you're willing to say, “No” to unnecessary spending. You can do it, if you really want to.
R: Unnecessary spending is usually what gets most people in trouble with their finances. By eliminating these types of expenses for a month, you can put this money to better use. For example, you can reduce your debt or put it towards retirement.
T: The time constraint on this goal works in two ways. Choosing six months as your window allows you to pick the right month, since some months are better for this than others. Also, designating only one month as “no-spend” makes it doable.
12. Creating an estate plan
“In the next three months, I will create an estate plan.”
S: This goal focuses on estate planning, which is what will happen with your money when you're gone.
M: Estate planning requires seeking assistance from financial advisors. Also, it requires an attorney to draft the documents. Therefore, the means for this goal is the actual meetings with these advisors and an attorney. Finally, the proof of achieving this goal is when you actually have the documents in hand.
A: This goal is achievable because advisors and attorneys make estate planning possible. On your end, you will have to set your mind to the future and accept that this is something that needs to be done.
R: Estate planning protects your family. It provides for them after you're gone. It alleviates the uncertainty of what comes next during a time of loss. By having an estate plan in place, you're taking care of your family.
T: Three months should be adequate time to meet with advisors. It will also give you time to have an important conversation with your loved ones about your estate. Finally, it will give your attorney enough time to create the documents.
13. Paying off smaller debts first
“In the next nine months, I will pay off my smallest debt first.”
S: This goal is very specific because it requires you to pay off your smallest debt first. This requires that you examine all of your debts together to determine which is the smallest.
M: Each month you can measure how much you've reduced this debt. Plus, you have a target to strive for. For example, if you know that your smallest debt is a $600 medical bill, you know that you need to pay off $600 in nine months.
A: At first, you may think that this goal is unachievable given your current circumstances if you're looking at the overall amount of the debt. Instead, divide the amount by nine. That makes it a smaller figure. It helps to break large goals into smaller steps to make it more achievable.
R: There are a couple of benefits to paying off smaller debts first. Overall, you have less debt, including less interest. Then, you can take the money you were applying to that debt to another debt.
T: Nine months is a good time limit for this goal. It gives you time to pay off the debt. Also, it breaks up the debt amount into more manageable portions. At the same time, you'll accrue less interest in nine months than you will in one year. .
14. Paying Cash Instead of Buying on Credit
“I will save up $1200 for a new appliance in the next year to pay in cash instead of buying on credit.”
S: Once again, by selecting a specific amount to save, you're giving yourself a target to achieve. Of course, you'll want to do research to determine the amount you need to save. Also, you might want to set your goal a little higher to account for price changes.
M: If you take the total amount to save and divide it by 12, you'll have the amount you need to hold back each month toward your goal. Doing this breaks up your goal into manageable chunks.
A: To account for the money you need to save, you can apply the money you've saved from eliminating your smallest debt or the money you've saved from a “no-spend month”.
R: Paying cash instead of using credit saves you in the long run. You eliminate interest charges. Plus, the whole process ensures that you're buying out of necessity and not out of desire.
T: Setting the time limit for a year gives you time to save up the amount you need without putting a strain on your finances. It also requires that you plan ahead when it comes to replacing appliances. Also, if you plan ahead and don't need to replace an appliance, you can set the money aside in case a major appliance quits working suddenly.
15. Cancelling a subscription
“In the next week, I will choose one subscription service to cancel.”
S: You only have to choose one subscription service to cancel. Therefore, you need to take a look at all the subscription services you currently use and choose which one you need the least. Maybe, there's one you really don't use that much.
M: Once you've canceled one subscription service, you'll have achieved your goal.
A: You can easily achieve this goal. If you're like most people, you probably have multiple subscription services you subscribe to. You just have to decide which subscription you can do without.
R: Subscription services have become a fad. Whether it's streaming services or a box of hygiene products, there are subscription services for various types of products. More importantly, they all cost money. Money that you could save by canceling one of your subscriptions.
T: One week is plenty of time to evaluate your current subscriptions to determine which one to cancel.
Final Thoughts on SMART Personal Financial Goals
Knowing your financial goals and putting them into the SMART format will get you on the path to a stable financial future. However, because we have all experienced the volatility of the economy and the job market, make sure your financial goals can be flexible and have some room for uncertainty.
Set aside time once or twice a year to go over your income, spending habits, and goals. Doing regular financial checkups will help ensure that your goals are well-informed, realistic, and relevant to your current wants and needs in life.
Adhering to your budget may be difficult at times, but as with most things, you will get better at it with time and experience. Practice making SMART goals like the ones outlined in this article to stay one step ahead of economic uncertainties and start increasing your net worth.
If you're a visual person, in addition to your SMART goals, you can use a vision board to help you achieve financial freedom.
And if you want more SMART goal ideas and examples, be sure to check out these blog posts:
- 15 SMART Goals Examples for Increasing Your Sales
- 11 SMART Goals Examples for a Job Promotion
- 13 SMART Goals Examples for Your Small Business Development
Finally, if you want to take your goal-setting efforts to the next level, check out this FREE printable worksheet and a step-by-step process that will help you set effective SMART goals.
Connie Mathers is a professional editor and freelance writer. She holds a Bachelor's Degree in Marketing and a Master’s Degree in Social Work. When she is not writing, Connie is either spending time with her daughter and two dogs, running, or working at her full-time job as a social worker in Richmond, VA.