Do you have an idea of how you want your future to look? Do you have goals that you’d like to meet?
Maybe you want to own your own home, create an inheritance for your children or grow your pension pot. Once you have figured out what you’d like to achieve, make sure these goals are SMART. For a goal to be considered SMART it must be specific, measurable, actionable, realistic and timed.
Specific
You must be specific about what you want to achieve. Consider factors such as what you want to achieve, why you want to achieve it and how you're going to achieve it. For example, if you want to increase your pension pot, think about how much you want to have saved for your retirement and then work out how you’ll achieve this. You might want to look at starting a private pension or increasing your contributions to your workplace pension.
Measurable
To ensure you stay on track, you need to figure out a way to measure the progress that you are making. Figure out which metric of your goal you want to track and then regularly check in with your finances to make sure that it is on track. Make a point of checking in on a specific day each month or quarter.
Actionable
It’s important to work out exactly how you’re going to achieve your goal. Think about the steps that you need to take. Will you need help? If so, who are you going to ask? You might find that you need extra tools and resources. For example, if you plan to save a certain amount per month in an ISA, you will need to find out which ISA is most appropriate for you. By creating a plan with actionable steps, you can make your goal much easier to reach.
Realistic
For a goal to be realistic, it must be something that is within your reach. For example, if you currently struggle to save £50 per month, it’s not realistic that you’ll suddenly be able to save £100. Take a good, hard look at your finances and decide what is realistic for your lifestyle. You might want to consider reviewing your budget to see if there are any areas where you can tighten up. If you feel your overall goal is unrealistic, break it down into smaller, more easily achievable chunks and build your way up to the main goal.
Timed
Set a realistic timeline to achieve your goal. It’s important to work out if this is a short-term, medium-term or long-term goal and set your timeline appropriately. Give yourself definite targets to meet. For example, instead of saying ‘I’ll save up over the next few years for the house deposit’, say ‘By the end of two years, I will have saved up the deposit’. This means that you can hold yourself accountable and reduce the chances of procrastination.
By trying to ensure that your financial goals are SMART, you increase your chances of success. If you want some help to figure out how to make your goals SMART, get in touch and we will be happy to help you make your money change your world.
It is important to take professional advice before making any decision relating to your personal finances. Information within this article does not provide individual tailored investment advice and is for guidance only. We cannot assume legal liability for any errors or omissions it might contain. Ethical Futures llp is authorised and regulated by the Financial Conduct Authority.