The start of the year is a great time to think about SMART goals, but it’s not enough to blindly follow this widely popular approach.
SMART goals. You know, specific, measurable, agreed upon, realistic and time-based. There are slight variations floating around (as listed below), which gives it a more comprehensive definition:
- S – specific, significant, stretching
- M – measurable, meaningful, motivational
- A – agreed upon, attainable, achievable, acceptable, action-oriented
- R – realistic, relevant, reasonable, rewarding, results-oriented
- T – time-based, timely, tangible, trackable
But something is missing. Consider these examples that fit the definition:
- Net Worth – Achieving your goal of having $1 million dollars by the time you retire at 65 is awesome, but it’s more important to keep that million dollars and not lose it right after.
- Part Time – You can pledge to work 3 nights a week as a side hustle to earn extra income, but that’d be meaningless if you quit after a month.
- Reduce Debt – Making a goal to eliminate your debt in two years is a mighty one, but what’s the point if you are going to dip back into debt?
A Goal Absolutely Needs to be Sustainable
I give more emphasis here at MoneyNing on the psychological and emotional side of personal finance than the practical side. It’s not because step by step guides aren’t useful, but we need more than that to succeed.
Financial freedom requires not only a quick fix, but a habit change. The five step guide that will for sure cut your monthly expenses in half is a nice place to start, but learn to see the beauty of frugal living and you won’t need to look for ways to cut back since you won’t consume more than necessary.
Don’t ask for a fish all the time. Learn to fish instead.
- It’s not enough to merely accumulate a massive nest egg. That’s why you need to focus on income rather than net worth in retirement.
- Part time is a great way to earn some more money, but working one day a week is much better than three if you can actually stick to your plan for the long haul.
- You can strive to be a high income individual and rid your debt that way, but a hiccup with your job and you will be right back to square one if you inflated your lifestyle along the way. That’s why simplicity is so powerful. It’s lasting.
Let me add an “S” to SMART goals.
S – Sustainable, Small, Simple
People who have some “SMARTS” in them will always do better. Career, money, relationship and everything else. Start your year right and make SMARTS goals.
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