It’s already February.
How many New Year’s resolutions and goals have you kept up with so far?
It can be hard to stay committed to your goals, but you need help you stay the course. This is where the SMART goals template comes in. It can transform your mindset and help you make lasting change — especially when it comes to money.
Whether you want to save more money, get out of debt, or get a handle on your student loan payments, SMART goals can help you succeed.
What are SMART goals?
SMART goals refer to a framework, often used in the business or education world, to guide people in setting and achieving goals. SMART is an acronym for Specific, Measurable, Action-oriented, Realistic, and Time-based.
Too often, we set vague goals with no clear path to fulfilling them. It’s easy to say you want to save more money, but how much do you actually want to save? By reframing your goal as a SMART goal, you force yourself to get specific and set clear time limits.
Here’s how you can apply the SMART goal template to your financial resolutions, one letter at a time.
1. Get specific
Every SMART goal is highly specific. Let’s say you want to spend less and save more. To reframe your goal as a SMART goal, you should take a hard look at your spending habits.
Figure out how much you’re spending in each major category — food, housing, transportation, and entertainment. Consider other monthly expenses, too, like student loan payments or car insurance.
Compare all of your expenses with your earnings to see the difference. That way, you can put a specific number on how much you want to save each month and more easily figure out how to do so.
As another example, let’s say you want to simplify your student loan payments. To get specific, you could say, “I’m going to apply for student loan refinancing to simplify my loans.” With this specificity, you’re already illuminating the path toward your goal.
2. Make your goal measurable
Next, make sure you can measure your goals with clear, definitive metrics. Again, saying you want to save money could mean anything. But how much do you want to save? What are you saving toward? Without answering these questions, you may end up with a vague anxiety about saving money for the rest of time.
To make your goal measurable, come up with a detailed amount. Perhaps you can say, “I want to save $50 a week for 24 weeks.” At the end of six months, you intend to have $1,200. Or, maybe you want to max out your retirement savings account to the $5,500 limit every year. That way, you’ll maximize savings for the future.
If your goal is to refinance your student loans, then figure out exactly what you want your new monthly payment and interest rate to be. For example, let’s say you currently pay $350 a month with interest rates ranging between 6 percent and 8.5 percent.
You’d like your refinanced loan to lower your payments between $300 and $320 a month with a 6.5 to 7 percent interest rate. By going into the process with quantified expectations, you’ll know right away whether to accept or reject a refinancing offer.
3. Make sure your goal is action-oriented
The “A” in the SMART goals template stands for action-oriented. In this stage, you set clear, actionable steps for achieving your goal.
To save money, maybe you need to reduce your restaurant spending from $100 a week to $50 a week. Perhaps you’re overspending on rent and need to move to an apartment that better fits your budget.
To refinance your loans, you must collect certain information. You need your outstanding balances, interest rates, and proof of income. You’ll also submit applications to banks or lending companies.
When setting financial goals, you must identify the actions you can take to achieve them. This step can reduce stress or anxiety you have around your finances. With a clear route forward, you’ll have a plan for getting out of the murky waters of financial instability.
4. Be realistic
When it comes time to set goals, it’s easy to overshoot. We think we’re going to make major transformations in a short amount of time.
While it’s great to aim high, you also don’t want to set yourself up for failure. You’re probably not going to go from making a $50k salary to being a millionaire in one year. If your credit score is scraping the bottom of the barrel, then you can’t expect to get the lowest interest rate on a refinanced loan.
The SMART goals template says to keep your goals realistic. That way, you have a better chance of achieving them. Plus, once you start to see success, you’ll feel empowered to keep improving.
5. Set time limits
Finally, SMART goals have clear time limits. They aren’t lifelong endeavors that are always just a little out of reach. Instead, they have an endpoint in sight.
Perhaps you want to save money to put a down payment on a house. Maybe you need to refinance your student loans before the prime rate goes up, making interest rates rise with it.
After setting a time limit, write out the actions you can take on a daily or monthly basis to reach your destination. You won’t have to rely on internal willpower but instead, will shift your focus to external behaviors.
Use the SMART goals template to achieve financial success
In the end, the SMART goals template helps you be proactive and accountable. If you want to manage your finances better, SMART goals should be your new best friend.
Whether you want to save for the future, get out of credit card debt, or repay your student loans faster, you need to set goals. But don’t forget to make them specific, measurable, action-oriented, realistic, and time-based.
This framework helps you stay focused on actionable solutions. Even if you encounter setbacks, you won’t be undone by them. Instead, you’ll have a clear road map toward your destination.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|5.81% – 15.37%1||$5,000 - $100,000||Visit SoFi|
|6.87% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|5.49% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|