SMART Goals: The Key To Achieving Your Financial Goals Efficiently

SMART Goals: The Key To Achieving Your Financial Goals Efficiently | The Loaded Pig

So many people struggle to reach the financial goals they set out for themselves because they didn’t fully develop their objectives. One method of ensuring you can achieve your financial goals, and any other kind of goals, is by creating SMART goals. SMART goals is an acronym for specific, measurable, achievable, relevant and time-limited goals. By creating goals using this method you are able to track your progress and measure your success.

Find out how to set SMART financial goals in order to get on the path to achieving them.

What Are SMART Goals?

The concept originated from Peter Drucker’s “management by objectives” process and later George Doran coined the SMART acronym in reference to goals set by management. Although the idea stems from the business management field, it can be used to create actionable goals for personal or professional applications. There are a few variations of the meaning of the acronym, but we will discuss the most appropriate version for creating personal finance goals.

We recently wrote about Why Dave Ramsey’s Baby Steps Might Not Work For You and we wanted to elaborate on an effective method you can use to set your financial goals. We think that financial goals should be personal and this means taking some time to think about what you want to achieve.


The first aspect of a SMART goal should define “what,” “who” and “which.” Basically make it as detailed as you can. A regular goal may be, “We will pay off our debt.” But this part of the goal would go into detail, “My husband and I will pay off our credit card debt.”


The best part of setting goals is being able to measure them. Quantify exactly what you’re striving to do. This means asking “how much money?” This step may require some research (and a little math) if your goal is to save for a mortgage down payment or save to buy a car in cash. For help with this, check out our article How To Make A Savings Plan For A Big Purchase.

On the other hand, you may just have to look up your credit card balance or your goal may be more arbitrary, like saving $500 each month to afford a purchase.

In our example, we would say “We will pay off our $3,748 credit card balance.”


Remember you’re setting goals with the intention of reaching them. Don’t set a goal that is so out of reach it’s unlikely you can achieve it. As George Doran wrote, “state what results can realistically be achieved, given available resources.”

If you are saving a couple hundred dollars each month, don’t start with a goal of saving $5,000 a month. Think about realistic goals that you can attain with your current resources.

For this part, state how it is achievable. So for our goal of paying off credit card debt, we would say “We will pay $350 each month toward our credit card balance.”

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How does this fit in with your other financial goals? If this goal is for you and a spouse, are you both supportive of the goal? Each goal you create should fit like a puzzle piece in the big picture of your financial goals. This means you should think about the purpose of each goal in relation to others.

If you have a few forms of debt, then the goal of paying off your credit card relates to the big goal of being debt free. For instance we might say, “This will get us closer to our larger goal of being debt free.”


SMART goals need to have a time frame. Whether it is long-term or short-term, you need to specify “how much time?” How many months or years will this take? Keep in mind that you need to be realistic, but this is a time frame that should remain unchanged. This means that you need to set a specific point in time for you to measure if you achieved your goal.

If you want to say, “We will do this in 4 years,” that’s fine, but you need to actually say when 4 years is. So if it’s Jan 1, 2020, you would say “We will do this by Jan 1, 2024.”

When you’re thinking about your goals, remember to think both short and long-term and set goals for both periods.

Break Down Goals

It is helpful to break big goals down into smaller, more digestible ones. In fact, if your big goal is to be debt-free then keep that in mind but don’t make that SMART goal until you have made, but not yet achieved, all of your smaller goals.

SMART Goals Examples

For example, here are 2 examples of the SMART goals that are pieces of the bigger debt-free goal:

  1. Credit Cards

S – “My husband and I will pay off our credit card debt.” 

M – “We will pay off our $3,748 credit card balance.”

A – “We will pay $350 each month toward our credit card balance.” 

R – “This will get us closer to our larger goal of being debt free.”

T – “We will do this in 4 years by Jan 1, 2024.”

  1. Car Loan

S – “My husband and I will pay off our auto loan.” 

M – “We will pay off our $2,590 auto loan.”

A – “We will pay $250 each month toward our auto loan balance.” 

R – “This will get us closer to our larger goal of being debt free.”

T – “We will do this in 3 years by Jan 1, 2023.”

If you have goals that relate to paying off multiple forms of debt, keep in mind that the order in which you pay off your debt is important if you have different interest rates. For some guidance on this, read our article Paying Off Debt: Snowball vs Avalanche Methods.

Write Your SMART Goals Down

It’s easy enough to think about setting SMART goals, but it shouldn’t just be a goal you keep in your head. Save it on your phone, write it in a notebook, put it on sticky notes all across your house. Whatever works for you, do it!

Fit SMART Goals Into Your Budget

Budget | SMART Goals: The Key To Achieving Your Financial Goals Efficiently | The Loaded Pig

A helpful way to make room in your budget for your financial goals is to use a zero-based budget. This budgeting method gives every dollar of your income a purpose, including savings and paying off debt. Check out our article to learn more, Make A Zero-Based Budget & Save 18% More Money.

It can be hard to achieve goals, but we think that it shouldn’t be hard to set goals. Try taking the time to set SMART goals and check in with yourself along the way to measure your progress.

Our Take

As a couple, we’ve been talking a lot lately about financial goals and the best ways to go about reaching them. One thing we think is really helpful is accountability. So share your goals with your friends and family. Talk to them about your goals and how they can support you. It can make all the difference to have a support system rather than going about it alone.

As we’ve mentioned before, one of our goals is to buy land in another state. We’re not exactly sure where we want to buy, so we are estimating how much money we need to save – for now. So we’ll call it $20,000 that we need to save in total to buy the land and cover closing costs. Over the course of 10 years that means we would need to save $167 a month, so we’ll round up to $170.

Here is our SMART goal:

S – We (Rebecca & Tiago) will save enough money to buy land in another state.

M – We will save $20,000 to purchase a plot of land.

A – We will save $170 each month to put toward our land savings.

R – This will get us closer to our larger goal of building our own home near mountains.

T – We will do this in 10 years by July 10, 2030.

We will add this savings amount to our monthly budget and be sure to keep it separate from our other savings. For us, it’s helpful to have a large goal that we’re working toward as well as smaller, more attainable goals.

Financial freedom begins with good habits.

Rebecca & Tiago,

Rebecca co-founded The Loaded Pig with the goal of helping people achieve their financial goals. Her passion for financial freedom has landed her on US News & World Report,, Cheapism, and many other sites. Rebecca earned her Master of Business Administration from the University of Florida and her Bachelor of Arts from the University of Miami. She is currently a professor in the business department at Broward College.