Setting Smart Financial Goals

Setting Smart Financial Goals

Managing your money wisely is​ the best way to​ make sure you and your family gain financial security. Money management is​ also extremely important if​ you own a​ business. All business owners need to​ understand how money comes in​ and goes out of​ their business-if you ignore budgeting details, your venture might not be successful. There are many similarities between budgeting for yourself and budgeting for your small business. When you understand the basics of​ money management for yourself, you will be more prepared to​ set up a​ budget for your company.

To manage your money wisely, start by setting financial goals and establishing a​ budget plan to​ help you achieve those goals. Financial goals are simply statements about things you wish you could afford; for example, you may have a​ goal to​ establish an​ emergency savings fund of​ $2,000 by the end of​ the year.

What are your personal financial goals? if​ you had $2,000, what would you do with it? Would you invest it​ in​ your small business? Would you buy a​ car? Would you make a​ home improvement?

You will be able to​ accomplish your goals if​ you manage your finances and put money aside on a​ regular basis. The key is​ to​ setting financial goals that are Specific, Measurable, Attainable, Realistic, and Trackable (SMART):

Specific. State exactly what you want to​ achieve, how you're going to​ do it, and when you want to​ achieve it. For example:

General Goal Statement: I want to​ improve my finances.

Specific Goal Statement: I want to​ pay off my credit card bill in​ 8 months by negotiating a​ payment plan with my creditor.

Measurable. a​ financial goal should be measurable so you know when you have achieved it.

General Financial Goal Statement: I will pay off most of​ my credit card debt soon.
Measurable Goal Statement: in​ the next six months, I will pay three of​ my five credit card bills in​ full.

Attainable. Make sure the financial goal is​ within reasonable reach.

General Goal Statement: I will save money.

Attainable Goal Statement: I will save $1,000 in​ a​ year by putting aside $3 each day.

Realistic. is​ the economic goal realistic for you? Don't ignore your limitations. Your economic goals need to​ be tasks that you can reasonably accomplish.

General Goal Statement: By managing my money well, next year I will become a​ millionaire.

Realistic Goal Statement: By managing my money well, next year I will be debt free and will have an​ emergency fund equal to​ three months of​ living expenses.

Trackable. Being able to​ track your progress encourages you to​ keep going and reach your fiscal goal.

General Fiscal Goal Statement: I will increase my savings goal every year.

Trackable Statement: Each year I will save 10 percent more money than the previous year.

If you are SMART about setting financial goals, you will be well on your way to​ managing your money in​ a​ way that will provide financial security for you and your family for years to​ come.

Setting Smart Financial Goals

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