Remember Your New Year’s Resolutions?

Set SMARTER Goals for a successful 2017 

The new year represents a time to reflect on the past and resolve to make changes for the future. It’s an opportunity to start over and finally change that undesired trait or behavior.  You start out with the best intentions, making resolutions and proclamations to change for the better, expecting that you’ll somehow find the willpower to resist temptation, but in the end you end up failing.

27% of people end up breaking their New Year’s resolution after one week.  55% of people abandon them within six months.  According to the Statistic Brain Research Institute, only 9.2% felt they were successful in achieving their prior year resolution.  It’s now June, how are you doing keeping your New Year’s resolutions?

The problem with resolutions is that they don’t work.  They’re too vague, they lack meaning, and usually there is no system for accountability.  No. 3 on a list of Top 10 New Year’s Resolutions for 2017 (Statistic Brain) is to make better financial decisions.  That’s pretty vague! 42.1% of respondents had money related resolutions.

So if you’ve resolved to make improvements to your current financial situation, to achieve better results this year throw away those resolutions and set SMART financial goals instead.  The acronym SMART refers to: S – specific; M – measurable; A – actionable; R – realistic; and T – time-bound.  The SMART strategy for goal setting can be used for any type goal, but since this a finance blog, we’ll focus on applying them to financial goals.


The first criteria for a SMART financial goal it that it should be specific, not vague or general.  In addition, it should be simplistically written and clearly define what you want to accomplish.  For example, the goal, “Make better financial decisions” is not specific.  A better a goal would be, “Create an emergency fund.”


The second criteria for a SMART financial goal is that it should be measurable so that you know when you’ve achieved your goal.  Additionally, a goal that is measurable allows you to track your progress so that you know exactly how far you are from achieving that goal.  Expanding on the previous example, a measurable goal would be, “Create an emergency fund consisting of 3 months of my household expenses.”


The third criteria for a SMART financial goal is that it should begin with a strong action verb instead of a to-be verb.  For example, “Be a better saver” is not a good actionable goal.  A better example would be, “Save $500.00 every month.” Use strong action verbs when setting financial goals, such as, start, open, create, eliminate, and save.


The fourth criteria for a SMART financial goal is that it should be realistic.  In other words, the goal should be attainable.  It’s important however, that your goal be outside your comfort zone.  You’ll experience a higher sense of satisfaction if you accomplish a difficult goal that forces you out of you comfort zone and requires you to stretch yourself in order to achieve it.  On the other hand, a goal that is so far out of our comfort zone that it is unrealistic, has no meaning since there is no possible way to achieve it.

For example, “Double my income this year,” may be a realistic goal for someone who owns their own business or makes a living earning a commission on sales.  But it may be a completely unrealistic goal for someone earning a salary and no means to achieve that goal.  A more realistic goal for that person may be, “Increase my income by 20%.”


The fifth criteria for a SMART financial goal is that it should time-bound.  The goal should be linked to a deadline that creates a sense of urgency.  Without a deadline or sense of urgency the goal is less likely to be achieved.  An example of a time-bound goal is “Save $10,000 by December 31st.”

Two years ago, in his popular online course 5 Days to Your Best Year Ever, Intentional Leadership guru Michael Hyatt expanded the SMART acronym to SMARTER by including two additional criteria: E – exciting; and R – relevant.


According to Michael Hyatt, the sixth criteria for a SMARTER goal is that it should be exciting.  The goal should be so compelling that it motivates you to power through those times when you feel like giving up. The outcome of the goal is so personally exciting that you are determined to see it through to completion.  An example of an exciting goal may be “Save $5000 for a month long vacation to Hawaii this summer.”


The seventh and final criteria for a SMARTER financial goal is that it should be relevant.  The goal should be appropriate for whatever stage of life you may currently be in.  A month long vacation may not be feasible for someone in a new career.  For someone with young children, instead of a month long vacation in Hawaii, the goal, “Save $5000 for a two-week family vacation at Disney World” may be more appropriate.

Changing your current behavior or creating a new one is difficult.  Especially when comes to changing your behavior in order to improve your financial situation. Clearly, resolutions don’t work.  Instead, employ a SMARTER strategy to set effective goals that work.

There is still time to make 2017 your best year ever!

By | 2017-06-05T15:00:37+00:00 June 5th, 2017|Financial Tips, All Articles, Financial Topics, Rick Taborda|