Setting financial goals is one of the best ways to motivate you to save money. If your goals are SMART, you’re more likely to achieve them. Here are a few tips for creating SMART savings goals in 2023!
What are SMART goals?
SMART goals ensure that your goals are specific, measurable, achievable, relevant and time-bound. It’s a framework that allows you to be clear and intentional with your ambitions.
S = Specific
Your savings goals need to be specific to your end goal. For example, you may be saving for a new car, a home deposit, or an emergency fund.
M = Measurable
You need to have an idea of your savings target so that you can measure your success. This means knowing your numbers and what figure you need to achieve to reach your goal.
A = Achievable
Your savings goals need to be realistic. It can be easy to aim high but there is no point in setting goals that are out of reach.
R = Relevant
Check in with your savings goals and make sure they are relevant and worthwhile. Are you working towards your long-term goals?
T = Time-bound
You need to ensure that your goals have a time frame, whether you are looking weeks, months or years ahead. Without a time goal, you are less likely to achieve your goal.
For example, rather than having a goal to save for a house deposit, a SMART goal may be to save $20,000 for a home deposit by 31 December 2023.
Set your 2023 goals and action plan
Think about your goals for 2023 and whether they are specific, measurable, achievable, relevant and time-bound. From there, set yourself a savings target so that you can achieve your goals.
For example, if your goal is to save $20,000 for a home deposit by 31 December 2023, your savings target may be to set aside $1,666 per fortnight for a couple which is achievable based on a household income of $200K.
If there are any other measures that you need to achieve in order to reach your goals, add these to your action plan. This could be setting up a new bank account or term investment, reducing certain expenses, or picking up additional casual work.
Keep yourself accountable
Once your action plan is in place, you need to ensure that you are regularly checking in on your goals. Setting financial goals should never be a ‘set and forget activity. Unexpected events during the year may mean that you are put behind or ahead of your target. We encourage you to review your goals on a regular basis to ensure that they are still SMART or whether adjustments need to be made.