Before I started my career path towards becoming a financial advisor, I had three primary financial goals:

  1. To spend less money than I earn (crazy, right?!)
  2. To generally maintain a couple thousand dollars in my savings account, “just in case”
  3. To save up enough money to go to Europe once per year

You may notice a few things that were absent from this list: actual, measurable dollar amounts, a plan for achieving those goals, and any mention of the long-term whatsoever. It’s not that I lacked any sort of plan or long term goals; it was just that I didn’t yet have vocabulary to describe what I wanted out of my finances.

Chances are, you’re in the same boat. In fact, if your goals sound like the ones I’ve listed above, this article is dedicated to you. Now buckle in, and prepare to do some soul searching about your financial goals and aspirations.

Types of Financial Goals

It is common to break down financial goals based on the time it takes to achieve them. More specifically, there are short-, medium-, and long-term goals. Typically, a short-term goal is anything you’re looking to achieve in the next 1-2 years, a medium-term goal takes place from 2-10 years, and a long-term goal is anything more than 10 years in the future. Common goals appear in the table below:

Of course, everyone’s goals and timelines are different. You may be already saving to buy a car and looking to buy something in a year or so; in that case, the down payment might be a short-term goal. Likewise, you may be saddled with a lot of long-term student debt, thereby making it a long-term goal.

To start the process of goal setting, take a few minutes and get all your financial goals down on paper. For now, don’t worry about making them super detailed–we’ll get to that later!

Take those Goals, Make them S.M.A.R.T.

Now that you’ve got a general idea of what your financial goals are, let’s take them a step further by turning them into S.M.A.R.T. goals, which are:

S – Specific – You know exactly what you’re trying to accomplish, both in terms of goal description and dollar amount necessary to reach that goal.

M – Measurable – You have a way of tracking your progress and therefore staying motivated to reach it.

A – Achievable – Your goal must be realistic and attainable, while still stretching your abilities. You don’t want to trip over a low bar, but you also don’t want to set your sights so high that you’re discouraged.

R – Relevant – This is a meaningful goal, worth spending your precious time, energy, and willpower on.

T – Timely – You have a specific deadline you want to reach your goal by.

As an example of what this looks like in practice, let’s update some of Past Michelle’s rudimentary goals, for instance, the nebulous goal of travelling to Europe once per year. We’ll consider each aspect of a S.M.A.R.T. goal in turn:

  • Specific – I will save $1800 so that I can take a trip to Europe next summer.
  • Measurable – I will set up a separate sub-account so that I can track my specific savings towards this goal.
  • Achievable – It’s a lot of money, but I have nearly a year, so I think I can make it happen.
  • Relevant – I haven’t been in over two years, so I’m excited to start making this trip a reality.
  • Timely – I want to start saving in September 2017, and have everything saved up by the end of June 2018, which gives me 10 months.

You can then combine these elements into one S.M.A.R.T. goal.

Old phrasing: To save up enough money to go to Europe once per year

New S.M.A.R.T. goal: I will save $1800 in a separate sub-account over the course of 10 months between September 2017 and June 2018, a total of $180 per month, so that I can fund next summer’s exciting trip to Europe.

See how specific and actionable that is? I’m excited to get started already.

Other Considerations

The benefit of the S.M.A.R.T. approach is that it brings a new sense of clarity and focus to your goals, not to mention that goals are a lot easier to achieve when you have a general plan for how to get there!

There are some weaknesses, however. First of all, it’s relatively easy to set a goal, but many people have difficulty following though. This might because you have a lot of goals you’re considering, but finite time and resources to make them happen. In other words, you may lack prioritization. In addition, the S.M.A.R.T. goal planning process doesn’t much speak to the other obstacles you might face in reaching the goal.

To illustrate, let’s revisit the European vacation example above, and look at three specific other considerations: prioritization, obstacles to meeting the goal, and tactics to overcome those obstacles.


Right now, I’m at the point in my life where I don’t have children and am lucky to have no substantial debts. For me, going to Europe next year is therefore a big priority, relatively speaking. On the other hand, if you have a ton of competing priorities, some of which might be much more pressing (like not defaulting on your student loans, or tackling a heavy credit card debt load), a trip to Europe might be more of an aspiration than a need.

Taking the time to look at all your goals side by side will help give you a sense of what’s important and what’s not.


While this may be your first time setting S.M.A.R.T. financial goals, it’s surely not the first time in your life that you’ve tried to reach a goal. It’s a worthy exercise to revisit both your past successes and your past failures to see what happened, and what might get in the way of your success this time around.

Take me for example. I am an A+, world class procrastinator. This means that when I set a financial goal, it’s tempting to put it off when more pressing things come along, or simply because it’s far away and doesn’t feel real to me. Of course, the downside there is that if I want to go to Europe in Summer 2018 but don’t start planning for it until February 2018, the odds of me being able to afford the trip are slim.

There’s also the chance that something external and out of my control happens that gets in the way. Let’s say for instance that my car breaks down and requires $1200 to fix. If I find myself in dire financial straits, I may find myself putting off the trip, or abandoning it entirely.

As you’re starting to formulate your S.M.A.R.T. goals, think about the types of issues that are likely to arise in meeting them, and take note. Having the knowledge of potential obstacles is the first step to preparing yourself against them.

Tactics to Overcome Obstacles

In general, there are three good ways to help overcome these financial obstacles: decreasing barriers to saving, focusing on your cash flows, and increasing accountability for your goals.

When you’re decreasing barriers to saving, the goal is to make it as easy as possible to separate the money and put it away without you needing to remember to save. Focusing on your cash flows involves managing your income or expenses so that you have more resources to put towards the goal. Finally, there are several ways you can play to your emotional side by increasing accountability for the goal. Specific tactics for each category are outlined in the table below:

Of course, you would also do well to examine any other tactics that have worked well for you in the past. If you’ve got a tried and true method for sticking to your goals, no need to reinvent the wheel!

Putting it Into Practice

To get started, take your list of financial goals you brainstormed above. Then, go through the process described above to reframe your original goal drafts into S.M.A.R.T. goals. Once you’ve got your S.M.A.R.T. financial goals all laid out, be sure to prioritize them, list potential obstacles for each, and develop ways to overcome those obstacles!

If you have any questions or comments let me know. Or, if you find yourself getting overwhelmed and need even more accountability, why not consider hiring a financial coach to walk you through the process and help you stay on track (ahem, hi!).

Either way, do let me know your goal setting process goes! I’m rooting for you! Good luck!


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