It is too easy to say “I am going to pay down my debt” and then let it slide. Instead of setting just any goal you need to set a SMART goal.
When I talk about a SMART goal, I don’t just mean set intelligent goals. SMART is an acronym. It stands for Specific, Measurable, Attainable, Results-Oriented/Relevant, and Timely. Let’s dig into each one of these.
Specific
When establishing a goal you need to be as specific as possible. So instead of just saying, “I am going to pay down my debt” you should say, “I am going to pay down my personal bank student loan.” The difference might seem miniscule but the impact it will have is huge.
By being more specific you have now established that you are going to hyper focus on your personal bank student loan. This means if you have government student loans you can drop those to the minimal payment. This might free up some cash to put towards your personal bank student loan and make it more likely you will achieve your goal. You have also established that this does not include any credit card debt or auto loan debt. Again that allows you to be more focused on the debt you actually are planning to pay off.
Measurable
In our previous example goal, “I am going to pay down my personal bank student loan”, we left out a way to measure our progress. What does “pay down” actually mean? Does that mean if we pay off $1 we have succeeded, well probably not?
Instead we need to include something that is measurable. A quick change to our goal would be “I am going to pay off $30,000 worth of my personal bank student loan.” Now we have an idea of how much we actually need to pay off and can measure it as time goes on.
Attainable
At this point our plan is to “pay off $30,000 worth of my personal bank student loan.” However, how feasible is that? Do you make $150,000 with minimal expenses? If that is the case then it is most likely doable. If you make minimum wage, it is impossible.
If you create a goal that is unreachable then you are setting yourself up for failure. Ultimately, you won’t make the progress you need to accomplish your goal and you will just give up.
So let’s lower our goal to something more attainable. Our new goal is “I am going to pay off $5,000 worth of my personal bank student loan.”
Results-Oriented/Relevant
Is our goal results-oriented or relevant? Well if our plan is to get out of debt then it sure sounds like it. But if your goal was to go to Europe on vacation then you are way off base. In this case we were responsible and focused on our Financial Freedom Journey.
Don’t worry; soon you will be creating more fun SMART goals like a vacation or dream car purchase.
The reason it is important to make your goals result-oriented and relevant is because if it is not in alignment with what you actually want to achieve then you will lose focus and not even try to achieve the goal.
Timely
Something seems to still be missing from our goal, “I am going to pay off $5,000 worth of my personal bank student loan.” Oh yeah, how long do we have to achieve it. I am sure in your lifetime you can pay off $5,000 of your student loan debt. But that isn’t going to do much good.
We need to establish a time and include that in our goal. However, the time shouldn’t be too long away. If the deadline is too far away you risk forgetting about the goal or holding onto that goal for no reason. Why wait 5 years to achieve a goal that you might be able to achieve in 1 year or even 6 months with extreme focus.
Our newly adjusted goal is going to be “I am going to pay off $5,000 worth of my personal bank student loan by December 31, 2017 at 11:59pm.”
Go Achieve Your Goals
When we started our goal was to “pay my debt.” After incorporating SMART into our goal it became “pay off $5,000 worth of my personal bank student loan by December 31, 2017 at 11:59pm.”
Look at the difference! By being Specific, Measurable, Attainable, Results-Oriented/Relevant, and Timely we now know what we actually want to accomplish and can create a plan to do it.
I can tell you with confidence that if you start making all of your goals SMART goals you will find that you are achieving much more of them.
Now it is time to make some of your own. Good luck and have fun!
Joel Parker
