Smart Financial Goals: Here is a List of Great Examples

The world of personal finances is filled with a lot of conflicting opinions, but one thing almost all experts agree on is the importance of setting goals. Financial planning isn’t just about making sure you have enough money to pay your bills or put food on the table. It is also about having a plan for what you want your life to look like in five or ten years and then working backward from there so that your steps are aligned with where you want to end up.

In this post, we’ll give you a list of great examples of smart financial goals that can help you improve your financial situation and succeed both now and in the future.

What are SMART financial goals?

SMART goals are specific, measurable, attainable, realistic, and timely. 

Specific: The goal should be straightforward. It should be clear and concise. It should state what you want to achieve.

Measurable: You need to measure your progress towards achieving the goal. You also need to determine when you have reached the goal.

Attainable: You should set an achievable goal. You must have the knowledge and skills to achieve the goal.

Realistic: Your goal should be natural or achievable within a short period. 

Timely: The target date for achieving your goal should be realistic and reasonable.

Here are a few examples of Smart Financial Goals: 

We all come from a unique situation and thus, have our list of financial goals for ourselves and our family members. It’s important to set smart financial goals based on your values and the priorities in life that matter most to you. 

Create a monthly budget and track your spending

One of the easiest ways to start managing your money is to create a monthly budget. It’s time for a reality check when you’re making more than enough money to live comfortably but still feel overwhelmed by bills and debt. You’ll need to get serious about setting specific financial goals if you want to make any real progress in the long term. 

Creating an adequate budget begins with identifying all sources of income, salary, or business income and tracking spending habits so you know where every dollar is going. It also means using tools like Mint or Personal Capital to see where your money goes each month and how much has been saved in cash reserves versus invested assets such as stocks and bonds.

Once you’ve established what it takes for your family to live comfortably within its means. 

There are ways that you can adjust both sides, such as increasing savings while decreasing expenses on things like interest payments from credit cards, cutting back on discretionary spending, eliminating unnecessary costs like entertainment, making minimum payments on high-interest credit card debts until they’re paid off ultimately, paying off lower-interest student loans before paying down higher-interest personal loans first, and transferring low-yield savings accounts into higher-yielding investment accounts with better returns over time.

Have emergency savings

An emergency saving is a must-have for anyone who wants to be prepared for life’s curveballs. If a sudden expense comes up and you don’t have the funds to cover it, like a high medical bill or car repairs, it can leave you scrambling for cash and potentially making poor decisions with your credit cards just to pay the bill.

When creating an emergency saving, a good rule of thumb is that you should always have enough cash in your bank account so that if something unexpected happens, your first response isn’t to go into debt handling it. 

The amount of money needed depends on many factors, including what type of emergencies are common in your area and how much money already goes toward saving up for big purchases such as furniture or vacations. 

An excellent place to start is $1,000, and once this goal has been met, any additional funds should go toward paying down credit card debt or building other savings goals such as college funds for kids or retirement planning.

Pay off credit card debt

You can pay off credit card debt quickly by paying more than the minimum balance on each card. It is a great way to save money because you will be paying less interest over time. Here are some tips on how to pay off credit card debt:

1. Cut up all unnecessary credit cards and close them. If you want to keep the credit card for emergencies, cut up all other ones and close them so you cannot use them again. You should also cancel any store accounts you have had in the past, such as Amazon.

2. Pay off your highest interest rate first. The best way to do this is by transferring funds from another such as an investment account into this one until it is paid off entirely before moving on to anything else.

3. Pay off smaller balances next but only after making sure that there is enough money left over in your checking account each month after all bills are paid. You might want to consider taking on a part-time job if necessary.

Build credit or improve your credit score

A high credit score can help you save money on loans and get better interest rates. Your payment history is probably the most crucial factor in determining how well you manage debt, so pay all bills on time. 

Paying late or not at all makes it look like you don’t care about paying off debts, even if only by a few days, and that’s what lenders want to see. You should also ensure that your name is spelled correctly on any accounts listed in your file, as a misspelling could lower the rating of an otherwise good report.

Pay down student loan debt

For many people, it’s an enormous non-mortgage debt they carry, and it can become a burden on their financial health for years. If you’re struggling to make ends meet and can’t afford to pay the minimum on your loans, it’s time to get serious about paying them off. 

Here are a few tips for how to do it:

1. Get a side hustle. If you have less money now, get additional income. You can start freelance work, sell stuff on eBay, or have extra work shifts. 

2. Make sure your loans have low-interest rates. If you have multiple loans with high-interest rates, consider consolidating them into one loan with a lower rate. It will save you tons in the long run.

3. Consider refinancing your student loans. Refinancing means taking out another loan for the same amount you already owe. Better terms could lower interest and eliminate it if done correctly.

4. Applying for an income-driven repayment plan. It will lower your monthly payments based on your income and family size and take advantage of some tax credits.

5. Ask if forgiveness programs are available through your school or employer, like Public Service Loan Forgiveness.

Set up a college fund for your kids

You can also set up a college fund for your kids. It is a great way to help them get through school and avoid the financial strain of student loans. Whether or not you plan on paying for their entire education will take time and dedication.

To begin setting up a college fund, save as soon as possible by putting aside $50-$100 per month in an age-appropriate savings account. Over time, this amount should increase until it reaches $1000-$2000 per month by the child’s high school graduation date. 

You can start even earlier if you want to provide more security for your child’s future expenses, such as private tutoring or test prep classes, etc.. But remember that every dollar saved now will save you much more later when tuition costs are higher.

Related: The Power of Now: A Financial Freedom Guide

Give to charity regularly

Charity is an integral part of the human experience. Giving back to others can improve your mood, make you feel more relaxed, and even help lower your blood pressure. It’s also a great way to help out those less fortunate than you, which will make you feel good about yourself.

Setting up a recurring donation through your bank or credit union is a great place to start if you’re looking for ways to give back without spending too much time or money on it. 

This way, every month, when they process your payments and automatically send $5 or $10 or any amount off directly into their account so that they never miss their payment because it’s automatic instead of having to remember each time someone asks if there’s anything else they can do for them.

Recommended Video: Serving God and People: Becoming Wealthy by Giving Back

Hire a financial advisor

Seek expert advice from a financial advisor. A financial advisor can help assess your current situation and recommend changes to achieve your long-term goals and financial freedom. They can help you set money goals and make them happen. They can advise on spending, saving, investing, and preparing for unexpected expenses.

Save for retirement now

It’s never too early to start saving for retirement. Several tools can help you create a retirement plan and set up automatic deposits into a retirement account, such as 401(K)s or IRAs. 

The earlier you start saving for retirement, the better. It’s essential to understand how compound interest works. Compounding refers to the process of earning interest on previous interest. It can be powerful enough to double your money over time if you invest regularly and consistently over a long time. 

For example, if you invested $10,000 at 8% interest compounded annually for 20 years, your initial investment would grow into about $21,556 after 20 years, an increase of more than $11,000. But if you invested that same amount of money at 12% compounded annually instead, it would turn into $27,979 after only 15 years, an increase of nearly $12k. 

To implement this concept today, you should set aside 10-15% or more of your monthly income towards retirement savings so that by the time you reach 65 years old or older, you won’t have any regrets in your financial future.

Related:  A Comfortable Retirement: How Much is Enough? 

Invest and grow your money

The first thing you need to decide where you want to invest. In the United States, real estate is a good asset for investment. There are many real estate investments, including commercial and residential properties. You may want to invest in both types of properties, so you have more options when you sell or rent out your property.

If you’re looking for a way to invest in real estate that’s more stable than owning a house, consider multifamily properties. 

Multifamily properties are buildings where more than one family lives, usually in separate apartments. These can be condos, townhouses, or apartment buildings, but they’re all the same: they have multiple units, and the landlord is responsible for making repairs and handling the day-to-day upkeep. 

Recommended Video:  How to Get Into Multifamily Investment: Tips for New Investors

Related: Multifamily Real Estate Investments: Easy Guide to New Investors

There are several reasons why investing in multifamily real estate. First, it creates an increased cash flow. Second, it has lower risks and high returns. Third, it has a strong market. Fourth, there are several tax benefits. Fifth, there is a forced appreciation of the property. Sixth, it is an excellent hedge against inflation. Seventh, it is ideal for property management. Eighth, it is a passive investment. Ninth, it creates generational wealth. Lastly, it is a winning business that benefits investors and all involved. 

Recommended Video:  The Power Woman that Builds a $600 Million Real Estate Empire 

If you want to know more about multifamily investments and wealth building, grab your free copy of Wellthy Capital‘s “Path to Wellth E-book”.

Be financially literate

Financial literacy is vital to achieving your goals because it is the best way to learn about how money works, how you can use it, and how to keep track of what you have. When you understand how money works, you can make good decisions in everyday life and how much you spend and invest. Knowing your available money will make planning for retirement and financial independence easier.

Related: Financial Independence: What is the Valuable First Step?

Financial literacy is critical. If you want to be financially educated, tune in to The Path to Wellth podcast and a new episode is released every Friday. In each episode, I sit with successful investors and entrepreneurs who have build their business from the ground up. We talk about their success stories, visions, and business strategies, and insights that are helpful for aspiring entrepreneurs. 

As an investor, I know how hard it is to build something from nothing. Learning through podcasts, and reading financial books is an achievable step to bolster your financial life.

Related: 11 Best Books on Goal-Setting to Achieve Massive Success

You can create your own goals, but it takes time, effort, and clarity. 

One of the biggest mistakes people make when settling financial goals is having no idea what their benchmark for success might be. You have to determine your benchmark for success. If you have no idea whether or not you’re making good progress towards something, then there’s no way to know when to celebrate or if celebrating is warranted. Remember these: 

1. Try to avoid making vague goals. Make sure that whatever goal you’re working towards has a clear definition of success so that when your hard work pays off and things go well, there’ll be something tangible to celebrate.

2. Break down big goals into smaller ones with specific timelines attached to each one. A big goal like “Saving $50,000 in my retirement account” isn’t beneficial because it doesn’t tell us how much we should save each month or how long it will take until we reach our target amount.

Instead of thinking about one big goal as one giant task, break down all large-scale functions into smaller chunks with specific timelines attached so that they’re more manageable, easier to accomplish, and more likely to get done.

Related: Is $1.5 Million Enough to Retire?

Conclusion

I hope this article provided you with some valuable insights on what kind of smart financial goals you have to set to improve your financial situation. Remember that these are just a few examples of goals that can effectively lead you to financial independence. Consult with a financial advisor if you’re unsure how to start creating your plans or what steps you should take, especially on your retirement goals.

Related:  Financial Independence: What is the Valuable First Step?