It is imperative to set goals to stay on top of your finances. Many people lose control of their money when they are to deal with debt. Without goals, you are less likely to save money for a rainy day. Many of you set goals to be back on the saddle but fail in your attempt. The reason is obvious: you do not set smart goals.
Goals that are specific, measurable, attainable, realistic, and time-bound are smart goals. Smart goals are different from regular goals. For instance, “I want to save money” is a regular goal as it is not defined – how much you want to save and what will be the timeframe?
“I want to save €2,000 by the end of this year so I could plan a vacation with my family” is a smart goal as it has a purpose and motivation built into the goal. When you are to deal with debt, you will undoubtedly have to create smart goals. They will let you decide how much debt you want to pay off by what time and what you will achieve by accomplishing your goals.
What are the advantages of setting smart goals?
The most significant advantage of setting smart goals is that you can stay in control of your finances. You will quickly achieve your goals, which means financial goals will be accomplished very soon. You can easily set aside money for a rainy day, which will help you avoid taking out urgent loans for bad credit in Ireland every now and then.
Those who are living paycheck to paycheck can also benefit from setting smart goals. You will have to decide how much money you can set aside based on your current financial condition. If you stick to your plan, you will certainly achieve your goals.
The best thing about smart goals is that they will keep you motivated, and when you are inspired to achieve them, you will definitely be successful.
What are the strategies to set smart goals?
Here are some techniques:
- Decide what you want to do
It means focusing on the end result of your financial plan. For instance, if you have decided to save a certain amount of money, what will your savings help you achieve? Whether you will use that money to settle your debt or you will use that money as a down payment on your mortgage. You must have a clear idea of what that money is up to. The more specific you are, the better it is.
- Assess available cash
You cannot choose a figure to stash away until you know how much cash you have. For instance, if you have decided to stow away money to buy a tumble dryer, you cannot choose a random figure for savings contribution every month. First off, you should assess how much cash is available to you. Then, you should figure out how much you need for your daily monthly expenses.
Given the chance that a large portion of your money goes towards essential expenses and you trim down your discretionary expenses, you can get to know how much is left with you. This money will be your constant contribution to savings every month.
If you already set aside money each month, you should try to allocate those funds. Some should go towards debt settlement, while others should go for vacation, retirement, down payment, buying a new gadget, and the like.
- Set a realistic timeline
You should set a realistic timeline to achieve your goals. Of course, you will be tempted to get it done sooner, but it depends on how much cash is available to you. To decide the proper timeline, you should divide the funds you need to achieve your goals by the amount you have. Note that this is a basic timeline.
Do not make the mistake of throwing each penny towards your saving goals because if you do so, you will struggle to meet emergency expenses. The contribution towards a rainy day fund should not come to a halt.
Although you have fast money loans in Ireland, you cannot qualify for these loans without a repaying capacity. No lender can give you the nod if you cannot repay the debt on time. Even if you can do so, it is more expensive than emergency corpus as you will have to pay interest on top of what you borrow. These rates will be quite high for subprime borrowers.
- Set milestones for larger goals
When you start squirrelling away for large expenses, you may find it harder to stick to your plan. You will give up on your goal. To deal with this situation, you should set milestones. You can divide large goals into smaller chunks. For instance, if you have to set aside €5,000, you can decide to lay aside €1,000 every six months so you do not fall behind on your plan.
Smart tips to hit the ground running
To make smart goals work for you, you should bear in mind the following tips:
- You can have several goals at a time. Develop a plan that is aimed at achieving all of them.
- Re-evaluate your goals as your financial situation changes. Fine-tune your budget to achieve them without any hassle.
- Set new goals whenever you wish, but make sure that your budget has the potential to do so.
- Keep tabs on your progress. Adjust your budget if it is taking too much find. Figure out the right cause and deal with it.
To wrap up
It can be quite difficult to achieve your smart goals, but with the help of the right strategy, you can achieve them. Assess your budget and then set your goals. Set a realistic timeline. Divide larger goals into smaller ones so you stay motivated as each milestone is hit. So, when are you going to set smart goals?
