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Setting SMART Financial Goals

Have you ever set a financial goal with the best of intentions, only to find yourself derailed after a few months? If so, you're not alone. Just look at how many people start the New Year off with a brand-new gym membership, only to stop going after a few months.

I find that it is easier to start with one short-term financial goal. For example, your long-term goal may be to have $1 million saved for retirement account by age 65. But if you are in your 30s, well, that’s a long time away. It can be hard to stay motivated for decades. How about setting a shorter-term goal to maximize your 401(k) contributions over the next 12 months.

This type of thinking is based on the SMART goal method. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. By applying these metrics you can create a simple plan for successfully achieving your financial goals.

Let's use an example: I want to update my estate plan. That can seem daunting. So many decisions to make! Here's how to apply the SMART method:

Specific: I will update my estate plan, including having all assets titled properly, with the appropriate beneficiaries.

Measurable: Each month I will complete the following steps:

  • Month 1:  Decide on which attorney I will use. (This may involve asking my advisor for recommendations, or checking in with friends and colleagues.)
  • Month 2:  Schedule the appointment with attorney. (It may take several appointments, with calls in between. Schedule them all.)
  • Month 3:  Finalize all decisions based on options presented by the attorney. (This may be the toughest part...)
  • Month 4:  Receive and review documents. Sign the plan! (A must do - celebrate upon completion!.)
  • Month 6:  Follow through - retitle assets, name beneficiaries to reflect new plan. (The attorney usually provides a "funding memo", with instructions.

Achievable: I am busy, but the time frame is workable.

Relevant: Yes. This is crucial for my family's well being. A priority. 

Time-Bound: I have resolved to achieve this goal in 6 months.

Now that you have identified your SMART goal, it's time to get started.  

Discuss the SMART goal with your loved ones. Track your progress, celebrate your wins, and know that six months from now you will have peace of mind that your estate plan is up to date. You'll have proof that you can set and achieve your financial goals.

Congratulate yourself!  Feel great about your progress.

But don’t stop now… set your next SMART financial goal. I'm here to help!

Shari Greco Reiches

Shari co-founded Rappaport Reiches Capital Management with one goal - to maximize the return on life for her clients. Please connect with Shari below. She loves to talk about investing, financial planning, and Barry Manilow.

The author does not intend to provide investment, legal or tax advice as these materials are for general educational purposes only. Please consult your legal, tax or investment professional for advice on your particular situation. This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. It is not intended to be a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results. Please refer to RRCM’s Form ADV Part 2 for additional disclosures regarding RRCM and its practices.