SMART Goals for the New Year

Have you made any new year’s resolutions for 2024? Resolutions offer a fresh start to the year and initially spark excitement that holds strong for a month or two. However, they can easily slip away when life throws its curveballs.

It will come as no surprise that the most common resolutions amongst Australians are fitness and diet related*, but financial goals closely follow with many eager to improve their saving and spending habits.

Creating and sticking to the goals we set is challenging, but following the SMART method may just be what you need to see them through. SMART stands for Specific, Measurable, Achievable, Relevant and Time-bound, providing a structured framework to turn vague intentions into actionable plans. So, how does it work?

1. Specific: Define Clear Objectives

To get started, identify precisely what you want to achieve. Instead of a broad goal like “save more money”, make it specific. For example, “save $5,000 in the holiday fund” or “pay off $3,000 of credit card debt”.

2. Measurable: Quantify Your Progress

Establish criteria to measure your progress. If your goal is to save money for a holiday, determine how much and by when. Tracking your progress holds you accountable while providing a sense of accomplishment as your reach milestones along the way.

3. Achievable: Set Realistic Targets

Setting the goal of becoming a millionaire by the end of the year isn’t achievable for most of us, so while it’s great to aim high, be realistic about what you can achieve and by when. Consider your income, expenses and any other factors that may impact your targets.

4. Relevant: Align Goals with Your Values

Aligning your financial goals with your values creates a sense of purpose and makes it easier to stay committed. If homeownership is a long-term aspiration, saving for a deposit might be more relevant than short-term investments.

5. Time-bound: Establish a Deadline

Attaching a timeframe to your goals creates a sense of urgency, adds structure to your plan and prevents procrastination. For example, instead of saying “save for a holiday”, say “save $3,000 for a summer holiday by September 30^th”.

When setting your SMART goals for the year ahead, remember that flexibility and adaptability are key. Our lives can change constantly, so your financial goals should evolve too. Good luck!