Conquer Your Big Dreams with These 5 SMART Financial Goals


Everyone needs to master these SMART financial goals to succeed!

Author: Kari Lorz, Certified Financial Education Instructor

Author: Kari Lorz – Certified Financial Education Instructor

Everyone wants to “do better” with their money. Yet, what that means to us varies.

But I can tell you that we all have the same theme running in the back of our brain. We want FREEDOM!

Freedom from whatever we are facing right now, be it the feeling that we are drowning in debt, scrimping from paycheck to paycheck, or that feeling that we won’t ever have enough saved to retire.

Here are the top SMART financial goals and how you can frame them so you’ll actually achieve them!

5 smart financial goals

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What are SMART goals?

If you want to set SMART goals, you need to be as detailed as you can so there are no questions as to how you move forward. Because when you leave room for interpretation or flexibility, you pause, question, and sometimes flounder and then ultimately lose steam. Finally, you quit.

So make it painfully obvious as to the steps you need to take! You should be answering the who, what, when, where, why, and how of achieving this goal.

  • S: specific – this is the who, when, where, and the what
  • M: measurable – how will I know if I have succeeded? How will I track my progress?
  • A: attainable – is this goal even reachable? What skills/things do I need to help me achieve this goal?
  • R: relevant – this is the why. Does this goal really matter? Are you willing and able to do the work to achieve the goal?
  • T: time-bound – when does this need to be done? Are there smaller due dates along the way?

You should be thinking about both short-term goals and long-term goals together, as one usually makes the other possible. For example, you wouldn’t buy a super awesome patio set if you hadn’t first purchased the house with a backyard, would you? Of course not; you’re not silly!

For example, a good rule of thumb is…

  • Short term financial goal = 1-5 years
  • Long term financial goal = 5-30 years

SMART financial goal #1 – Dump our debt 

It’s common knowledge that Americans are deep in debt, yet it’s staggering when we see the actual amount. As of March 2022, Nerdwallet found that the average US household held debt of $170,182, to the turn of $17.05 trillion nationwide.

Yet, that’s all debt; let’s break it down into “good” vs. “bad” debt. Generally speaking, all debt is bad, but there are degrees to that.

Bad Debt = debt on depreciating assets (i.e., credit card debt, automobile debt, etc.). You are essentially losing money on these bought goods.

Good debt = debt on appreciating assets (i.e., mortgages, student loans, as the degree will generally get you a higher paycheck). Aka their value will increase over time.

So let’s just look at “bad debt” for this smart financial goal. According to the same survey, US households averaged $7,027 in credit card (revolving) debt, totaling $416 billion. Additionally, $27,000 in auto loans, totaling $1.36 trillion. Ouch.

What’s interesting is that the St. Louis Federal Reserve tracks US debt payments as a percentage of income, and they found that in Q1 of 2023, the average household only spent 9.83% of their income on debt repayments.

This figure is down from previous years, which could mean that people are keeping larger emergency funds (yaa). Or that their income has gone down, and so, have less to put towards debt payments, potentially only paying the minimums.

So to turn this generic goal of “dumping debt” into a SMART financial goal…

  • Specific – Pay off my Visa and Mastercard in full by the end of the year by working the debt snowball method.
  • Measurable – I have $238 every month to put towards debt payments. I need to increase this amount to $280 in two months to get to my goal of $0 balance on those two credit cards.
  • Achievable – Yes, this SMART goal is an attainable goal if no other immediate financial needs come up. My biggest hurdle will be the motivation to keep to my budget.
  • Relevant – Yes, this goal matters to me! I am so stressed out about money that I lose sleep, and negatively affects my happiness. It’s important for my health & happiness! And I need to do this step first before I can, in good conscious spend money on the big vacation I want to take in the summer of the following year.
  • Time-Bound – I want to do this by the end of this year. At the end of each month, I will fill in my progress tracking chart to ensure that I am on track. If I am not making $280 in repayments, I will pick up two additional shifts at work to raise my income and put the pay from those two days directly towards debt repayment.

Depending on your debt and how aggressive you are with repaying it, this is generally a short-term financial goal.

SMART financial goal #2 – fully load your emergency fund

Sometimes setting goals isn’t that glamorous. GASP! Haha! I know most financial goals aren’t glamorous; they’re stodgy, basic, and a bit boring. But, to me (and most finance nerds), boring is great! Boring means that you have no worries!

Having a bunch of money set aside in a savings account is an excellent example of a boring personal finance goal. Yet, this boring goal delivers “security,” and you can’t beat that feeling! Seriously, feeling secure and safe is one of the very best feelings a person can have; it’s a basic human need/desire.

One of the main drawbacks of not having an emergency fund is the constant stress that comes with it. And financial stress is one of the hardest to handle, as it’s ongoing, usually long-term, and debilitating to your health & wellness.

Now how much you contribute is up to you, but a good rule of thumb is to save 10-15% of your income in a tax-advantaged savings account (401k, IRA, 403b, etc.). If you are brand new to saving, you should start with an initial smaller goal, such as contributing the “match amount” that your employer contributes, as you’ll be taking advantage of the free money that you can get from your employer. Usually, this is somewhere between 3-10% depending on the industry and the company.

If you want to be super smart, contribute as much as you can afford, and then set your account to automatically increase by 1% every year. Then, set a calendar reminder to review it yearly and increase it more (do it around the time of your annual raise, so you don’t notice the increased withdrawal). You will reach your savings goal much faster than you think.

If you want to turn this into a SMART goal, you can take the same steps as SMART financial goal #1, dumping your debt. The only difference is that you’ll put your money into your own savings account instead of someone else’s! Your emergency fund savings goal should also be achieved faster, as you’re not paying interest as you are with debt payments.

This is a short-term financial goal.

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SMART financial goal #3 – start saving for retirement

Yes, another boring sounding goal. But honestly, this is the most exciting! Hear me out… You are saving for a time when your life will be your own to live how you want! What’s more exciting than that kind of financial security?

In the past few years, the FIRE movement has grown exponentially, and for a good reason! Long gone are the days when we work until we’re 65 and then live sedately, rocking on our front porch. Now people want to retire at 40 (just a random age) and actually LIVE!

The Financial Independence Retire Early movement is all about saving now, as much as possible, so that we have “freedom” for a much longer time. Freedom to travel, volunteer, read, nerd out, and do puzzles (no judgment here) is alluring, to be sure! But living very modestly now isn’t for everyone, I know. Even if it’s not your style, you should still be contributing to your retirement, whether that happens at 45 or 75 or any year in between!

We want to think that we’ll retire at the perfect age and that you have plenty of time to contribute to your retirement accounts. But the key to a fat account is absolutely taking advantage of the power of compound interest, and the golden time is to start while you are fairly young!

Besides, you may not work as long as you expect; your contributing years may be cut short. For example, you could become disabled or have to leave the workforce to care for an ill family member. Your position could be eliminated, or your company could go under. Anything could happen, so please don’t wait. Starting early and harnessing compound interest is your ultimate BFF!

This is a long-term financial goal. You should start this goal as soon as possible, even while working on financial goals 1 & 2! Don’t delay; start today!

I know financial planning sounds intimidating, but you don’t need to see a financial planner these days (but you certainly could). There are lots of financial literacy sites available that you can learn from. ETRADE has a huge knowledge base learning center, and so do Fidelity and Vanguard.

In fact, a great personal financial goal to help you get comfortable is to read one personal finance article a day. Choose two websites you trust, and each morning read one post while you are making your coffee. (see, that’s a very specific goal that is totally achievable for anyone’s financial situation).

Goals 1-3 are your base goals, your foundation, so to say. You absolutely must have a strong base in order to build something that won’t topple over at any moment. So if you have big dreams, say starting a business, traveling the world, or going for that Master’s Degree, you must get 1-3 done first!

SMART financial goal #4 – save for vacation/first home/new car

Everyone should complete financial goals 1-3, and once you go through those, you move on to whatever it is that you want to do or achieve. With 1-3 done, the world is yours; you can start saving for your big dreams!

Things like vacations, travel, and saving for your kid’s college all become possible and closer. Again, the original SMART framework given in financial goal #1 still applies, but the small details will change.

Things like the end date, the amount needed in total, and per month. The “how” I will earn/save will change. But the process remains the same. Be specific with your details, put dates in, write out the why of your goals, and be sure that this is something you really want! If you don’t really want it, you’ll lose motivation and stop progress. If you need some ideas on how to keep going, check out this post to stay motivated while saving money!

Don’t forget to check in on your goals to be sure that you still want this goal you set out months and months ago. There’s no shame in changing courses as our lives continuously evolve and grow. I just don’t want you to be hell-bent on achieving a goal if it doesn’t make sense anymore.

Generally, this is a short-term goal, but it can change & evolve into many goals that will make it a long-term commitment.

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SMART financial goal #5 – become a valueist

The underlying concept of being a valueist is something that I wholeheartedly support and strive for!  ChooseFI defines being a valueist as “In terms of financial independence, a valueist is someone who spends money on experiences or things that they truly place value on.” I wish everyone took the time to really analyze and define what they value. 

For example, I value experiences over things, and I also value family fun time. So My husband and I choose to splurge on vacations while parring down everyday purchases. We both drive old, dinged-up cars with well over 100,000 miles on them and don’t have any plans to buy new cars anytime soon. 

Lending Tree states that “The average monthly car payment in the U.S. (in 2023) is $725 for new vehicles, $516 for used vehicles, and $586 for leased vehicles.” So instead of paying that money out every month for two cars, we drive old cars and dump all of that into our vacation fund.

So what do you truly value? Do you know your personal core values? If you’re not familiar with the term, I want you to know that defining your values can wildly change your life for the better. Because you are living your life in alignment with what you hold to be most important.

Other financial goals examples…

  • buy a car
  • have a down payment for your home
  • do a home remodel
  • participate in your workplace retirement plan
  • take a bucket list vacation
  • double your monthly income with a side hustle
  • put kids through college
  • fully fund your retirement account every year
  • start a business
  • cut your living expenses by 25%
  • donate to a cause you believe in
  • earning $________ a year
  • having a net worth of $_________
  • being able to support your family on one income
  • having a 100% debt-free Christmas
  • debt free wedding
  • paying off your mortgage
  • owning a vacation home
  • set up a working monthly budget
  • have an 800+ credit score
  • payoff your student loan
  • buy a boat (but please don’t)
  • taking ______ lessons
  • buying only organic food at the grocery store
  • belonging to _____ gym/club
  • achieve financial freedom by having 25x your income saved by the time your 45
  • having a stress free life because you don’t need to worry about money!
debt free quotes - unknown author

With all of these financial goal examples, you could/should write “with cash” at the end of each one, yet it’s not necessary. Of course, paying on a credit card to earn rewards and then immediately paying it off with money already saved up is best, but not always realistic.

SMART financial goals worksheet

If your brain is swirling with ideas and you want to be sure to have all your bases covered, then grab a piece of paper; you’re going to make a SMART financial goals worksheet to plan it all out. Write & answer these questions…

If your brain is swirling with ideas and you want to be sure to have all your bases covered, then grab a piece of paper; you’re going to make a SMART financial goals worksheet to plan it all out. Write & answer these questions…

  1. What’s your big goal – write it out in a meaningful way, where you phrase it so you FEEL it and want it!
  2. Why do you want this goal so badly? What will change or be possible when you achieve it?
  3. Write out your goal in the SMART format – BE SPECIFIC.
    1. Is this a specific goal?
    2. Is this a measurable goal?
    3. Is this an attainable goal?
    4. Is this a realistic financial goal?
    5. Is this goal time-bound? Specific end date or a short-term goal, or a long-term goal?
  4. What roadblocks may you run into?
  5. How will you mitigate those roadblocks?
  6. What resources/tools/knowledge will you need?
  7. Who can help you or guide you?
  8. How will you stay motivated?
  9. What reminders and check-in dates will you have (put them in your calendar now)?
  10. What is the first actionable step you need to take, and by when?

I want you to focus on that last question for a moment. Sometimes people write these big goals out, and then they are stuck with how to actually start. They know what step #14 is but how do they begin?

I know financial goal setting sounds intimidating, but once you get that first step out of the way (and the first step is always the hardest), the ball begins to roll and gain steam you will be on your way (that’s why smart goal setting is so effective, each step builds upon the last, and it’s all laid out, you just have to execute the plan). But take the time right now to figure out that first actionable step.

At the end of the day

Having SMART financial goals (and actively working towards them) is the ultimate adulting example, but don’t feel that this is the end of all your youthful fun!

Remember you’re working towards the ultimate goal, your freedom! And freedom is the biggest dream and the quintessential ultimate financial goal for us all!

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What is your big SMART financial goal?

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  1. Setting SMART goals is so important as it greatly helps us defines our objectives and improves our ability to reach them šŸ™‚

  2. Absolutely love SMART goals. You explained how to apply them to finances really well and I’ll definitely be applying this advice to my life

  3. It is so easy to lose track of money goals when we are bombarded with things to want. Thank you for sharing this smart financial advice!

  4. This is a very good blog to read especially in times like these when Covid is affecting so many people. I have found now more than ever I have been putting money aside in an emergency fund to help be prepared for the future. Not only have I been putting money aside for emergencies but have been trying to put money away for things like retirement or for my future wedding.

  5. I like the SMART money goals breakdown! It helps people identify their “why”. I personally believe that all debt is bad (even student loans and mortgage!), so we worked hard to pay those off ASAP by identifying our why. It helped so much when we felt deflated!

    1. Congratulations on being 100% debt free! That mortgage is a hard one, but I’m so glad you have that weight off of your shoulders! And you’re right, a financial why is so important, it keeps you motivated when things get hard.