How To Set SMART Financial Goals

“If you want to be happy, set a goal that commands your thoughts, liberates your energy, and inspires your hopes.” —Andrew Carnegie

Money can be very sneaky. Maybe you've noticed? It can easily find a purpose if one is not set for it.

So it should come as no surprise that it is very difficult to be responsible with your money if you're not working toward short or long-term financial goals which can sound like anything from ‘Make a budget’ to ‘Retire by 40’. 

Goals are personal and highly individualized to reflect your personal and family situation, needs, and wants. They can range from retirement and travel savings to emergency funds or house down payments.

In all this, one thing is for sure. 

Setting smart financial goals is a big step towards achieving financial security -  it's right at the core of proper financial planning. 

Related: What is a financial plan and how can I build one

So let’s jump right in and find out how to set financial goals and just as importantly, stay motivated along the way. 

Setting SMART Financial Goals For Financial Security

Key Attributes of SMART Financial Goals

Like any other life goals, financial goals should help you focus your efforts and use your resources and time productively, but this is only possible if you set SMART goals. 

  1. Specific
  2. Measurable
  3. Achievable
  4. Relevant
  5. Time-bound

SMART financial goals are very helpful in ensuring you have clear, time-boxed goals to which you can hold yourself accountable. 

1. Specific

Your goal should be clear and as specific as possible to allow you to focus your efforts. Ask yourself the 3 Ws to help you here.
What am I looking to achieve?
Why is this important?
Who is part of this goal?


My husband and I aim to save $45,000 towards a downpayment for a house to save on our current rental costs.

2. Measurable

Measurable goals allow you to track your progress easily, hit milestones, and stay motivated on your way to achieving your goals.


We will need to save $1250 a month for the next 36 months to reach $45,000 in 3 years. 

3. Achievable

Your goal needs to reflect your current and projected situation in order to be attainable. Don’t get me wrong - your goals can be stretch goals which push you further than you can currently imagine yourself going, but they should still remain possible. The big question to ask here is How - How can I accomplish this goal? 

A motto to keep in mind here is slow and steady. Don’t go setting up goals that require overhauling your entire financial life and leave you burned out soon after, but one that is gradual and attainable in nature. 


I can work overtime to earn more money and apply for a better-paying job within a year aiming to make an additional $8000, and my husband will start a side hustle selling his artwork. My husband and I can each direct our bonuses towards this goal and we will cut out the eating-out budget to save an additional $100 a month.

4. Relevant

This step is about ensuring that your goal is realistic and in line with your other key goals, current income, how much time you can dedicate toward it, and how much you can drive it forward.
Some questions to think about are:
Is this the right time?
Is this in line with my other efforts/needs/goals?
Is it applicable in the current socio-economic environment?


This goal is in line with our goal to cut our monthly eating-out budget by $100 where we have found that we tend to overspend. 

5. Time-bound

Every SMART financial goal has a set timeframe. These timelines help keep your goals in focus, and they help direct your everyday actions. 

OK, so you might not want to pass on that 2nd happy hour for the week that you know will cost you another $50. But when you remind yourself that it will be another $50 toward that downpayment and that you will be a homeowner in another 2 years if you just keep at it, it will be easier to ask your friends to join you for some (more affordable) drinks at home.

A time-bound goal will usually answer the question When.


In 3 years, my husband and I want to be homeowners: In 1 year, we plan to save up 25% of toward our goal, in year 2, we plan to save up 35% toward our goal, in year 3, we plan to save up the remaining 40%. 

Tips to staying motivated to reach your financial goals

1. Write down your goals

So you have identified some goals that you would like to achieve. Maybe you want to take that trip to Hawaii? Or to save up for your kids’ college. Write down your goals - and make them SMART. 

Get this: You are 42% more likely to achieve your goals if you write them down. It helps you visualize your future, understand the impact that your actions now can have on your future, and helps you prioritize. 

Ok now you may think I’m being silly, but go on. Try it for a few months. It won’t cost you anything. Write down 5 goals and break them down into smaller milestones. Refer back to your written goals as time goes and as you hit your milestones. Notice how you envision your future more and more and get even more motivated and better at prioritizing. 

Mark Victor Hansen couldn’t have said it any better, “By recording your dreams and goals on paper, you set in motion the process of becoming the person you most want to be. Put your future in good hands—your own.” 

2. Celebrate the Milestones

Speaking of milestones, celebrate them! Acknowledge and reward yourself for your efforts. To reach your goals, you will likely have to work your butt off, and you should reward yourself. 

Now, hold your horses, before you go on throwing a $1000 party for hitting a $3000 milestone toward saving toward your emergency fund, that’s not what I am saying. 

Instead, incorporate small amounts of money for indulging when you hit your weekly or monthly milestones.

3. Have an accountability partner 

Try to surround yourself with people who are fiscally responsible are set on their financial goals as well. Whether we admit it not, relationships have a strong impact on our financial lives. 

Pursuing your goals won’t be easy so you will need all the motivation that you can muster - whether from your significant other, friend, mentor, or certified financial planner. Have a partner who helps you stay on track.

4. Read self-development and personal finance books 

I know, I know...

You might be thinking, how am I supposed to set aside time to read books when I’m out here trying to hit very real goals! 

I get it, but let me let you in on a little secret. The right books will motivate and inspire you daily, fuelling you with new perspectives and information to keep you, and your to-do lists, going. 

Self-help books often promote the power of positive affirmations which studies have found to motivate you and boost your self-esteem. Among wealthy people, 88 percent read 30 minutes or more for self-improvement every day. This is according to Thomas Corley, author of ‘Rich Habits’ which is based on a 5-year study of self-made millionaires.

Final Thoughts

Setting financial goals is a great step to achieve financial security. It is the bedrock of any good financial plan

If you are thinking about SMART financial goals, you are already way ahead of the curve. But don’t just stop there.

Start small - write one goal that you would like to achieve. Then whether a short-term financial goal or a long-term financial goal, make it a SMART financial goal and go from there. 

How to set SMART financial goals (Short and long-term financial goals)

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