The New Year brings with it a renewed sense of what “could be” and often we find ourselves making goals to try and achieve this. Whether your goals are related to healthier living, financial success, quitting bad habits or making changes in your personal life, it often requires substantial commitment. In fact, research has shown that most New Year’s Resolutions are broken by February, and often don’t get through January. Why is this?  In short, change is hard. Change is harder without a detailed plan. If you are trying to make some changes, creating S.M.A.R.T. goals is the way to go.

Let’s take a “money saving” example.

S- Specific: The goal has to be specific. “Save Money” is too vague. Are you looking to start an emergency fund? Do you need fancy clothes for your best buddy’s wedding? Identify what your goal is about.

M- Measurable: How will you know when you have achieved your goal?  You need to know what defines the finish line to develop a goal. “Save $500” is a very good start for an emergency fund.

A- Attainable:  Carve out a path that outlines what you will need to do to achieve the goal. For example: “I will have to set up a new savings account. I will save $50 from every pay and transfer it at the end of the month.”

R- Realistic: A realistic goal should take into account the reality of your time commitments, salary, and personal circumstances. Is your expected timeline for the goal too aggressive? Modify it accordingly.

T- Time-based: Set a time for completion of your goal. In some cases, this is easy (saving money for a Birthday trip). Other times, the goal doesn’t have a firm deadline. If you want to save money for an emergency fund, you will have to identify a completion date in order to keep your motivation in high gear. “If I can save $50 each pay, this will only take 10 pay periods.”

Traditional Goals

Save money in the new year

S.M.A.R.T. Goals

I am going to save $500 for an emergency fund. Based on my salary, I can only afford $50 per pay to go toward this. I will need 10 pay periods to meet this goal. Having cash in a jar at home is too tempting, so I will put it in a free savings account. If I do this for 10 pay periods, I can achieve this goal by the end of May.

Have a wonderful 2018 and if you do set goals for yourself this year make them S.M.A.R.T. Goals! And if one of your goals is to save money look no further than McDougall Insurance to save you money on your insurance. Good luck!