Save and Spend Smartly: Using SMART Goals for Your Personal Finances


You might have set financial goals at the start of the year, but you’re not seeing results by the end of the first quarter. You might have aimed to achieve financial freedom by the end of the year, but you’ve barely done anything to meet that goal.

Goals—such as achieving financial freedom, earning more money, or paying off debt—are made with good intentions. Still, they may not be helping you meet your financial goals. If you want to improve your financial health, it’s not too late to try again.

This time, use the SMART methodology to achieve your financial objectives. This methodology revolves around the concept that goals must be specific, measurable, achievable, relevant, and time-bound so you can meet them more effectively. Let’s look at the details of this methodology.


According to Mark Murphy, chairman and CEO of Leadership IQ, describing your goal in detail gives you a better chance of accomplishing them. Make your goals more specific by answering the five Ws:

  • What is my goal?
  • Why is this goal important to me?
  • Who is involved in achieving this goal?
  • Where should I achieve my goal?
  • Which resources or limits are involved?

It’s not enough to say that you want to earn more money. Stating exactly how you plan to do it is better. For example, you may say you aim to make more money by starting a side hustle, or you plan to cut back on spending by limiting your instances of eating out. If you’re planning to buy a new home in Tempe but are still paying off a current mortgage, you may list down refinancing as one way to achieve it.


It’s not enough to know what goal you want to accomplish; you must also be able to measure how much you have achieved. For example, if your goal is to eliminate existing debt, cite the amount you plan to pay off for a specified period.

Aside from the amount you must meet, set other performance indicators that measure whether you’re achieving your goal. For instance, if you’re aiming to spend less money, set a daily, weekly, or monthly limit. If you went beyond that amount, it means you’ve gone over your budget.


Devote your time to making sure you stand a good chance of achieving your goal. If you make your goal too broad or too ambitious, such as “saving up to a million dollars within the year,” you become less motivated. Plus, your monthly salary of, say, $500 makes this plan impossible to reach. Set a goal that you can attain with certainty, then break it down into bite-sized goals you can achieve within your time frame.


Make sure that your financial goal aligns with factors like:

  • Your current schedule
  • Current socioeconomic status
  • Current skills
  • Existing goals (not just your financial goals)

If you aim to earn more money by doing a side hustle, ask yourself if you have enough time in your schedule to do so. Or, if you plan to start a business to support your earning goal, you might have forgotten that you don’t have existing skills to run a business.


Every goal must have a start date and finish date to give yourself a sense of urgency. If you’re planning to pay off all your debt, when is your deadline for accomplishing it? If you’re saving up for a trip, how much should you have set aside after three months, six months, one year?

Whatever your financial goals may be, take the time to define them and create a plan for how you’ll achieve them. Knowing what you need to do and how soon you need to accomplish it will give you better results. By setting SMART financial goals, you don’t have to work hard for your money—instead, it will work hard for you.