I’m definitely getting rich next year – you said to yourself last year. At the present, you see yourself busily crunching some numbers trying to make ends meet – it’s yet another failed year saving a little bit of money.
What have you done wrong? You asked yourself. You had a goal in mind. Isn’t it enough?
Apparently, it isn’t.
So how can you not commit the same mistakes of the past?
If there’s one thing I learned at work (and haven’t been doing it at work but able to use it somewhere else) it’s setting up SMART goals –
S – specific
I obviously love writing. I love how an ink carefully comes out of a pen and how it makes ideas come to life. I have listed down a hundred dreams and aspirations, writing down goals for the coming year is also one of the things I like to write about. However, Let go of the vague ‘I want to be rich’ phrases, instead, specify how rich you want to be, like:
I want to start building an emergency fund.
I want to start investing for my son’s college education.
M – motivational
Now that you have written down few specific goals, feed yourself with the why’s you want to achieve it. If enough motivation can move mountains, you can start building your financial stability too.
A – achievable
Don’t overwhelm yourself with big numbers – the higher you aim, the risk of failing is higher, too. What works for me when starting a new habit is I start with small, baby steps, then committing myself in doing it repetitively, with gradual progression.
R – realistic
Lure yourself away from the idea that you will be a millionaire at the end of next year, especially if your gross annual income isn’t reaching a million yet. You don’t have to quit eating, just to save!
T – time-based, time-bound
Set a finish line for your goal. With an end point in mind to motivate you, the little hurdles are nothing but part of the race you can easily overcome.
Aside from the SMART approach, another lesson I learned in the office is the Agile Approach, which is also a great thing to incorporate when starting to manage your finances. Since nothing is fool proof and you may encounter surprises in the course of your timeline, at least be able to move swiftly, in the quickest time possible. Set monthly or quarterly checks to see which one is working, and which of those needs to be ditched immediately. By giving yourself time to identify your mistakes, you give yourself time to learn.
So what should your goals be? Don’t forget to setup your SMART goals, and be agile all throughout.
Happy holidays and may we all be financially secure in the years to come!