So, you’ve decided you want something….you’ve set a goal. That’s a great first step, but now what’s your plan to achieve your goal? You should ensure (or update) your goal to be SMART: Specific, Measurable, Attainable, Relevant or Realistic and Time Relevant. After all, “a goal without a plan is just a wish” (Antoine de Saint-Exupery, French writer). By taking a few extra minutes to develop your goal and create a plan, you’ll improve your chances of achieving it (or, in our case, financing your goal).
Let’s assume your goal is to “take a dream vacation.” Here’s a checklist to help turn your goal into a SMART one:
- Be specific: I want to save $3000 by the end of the year so I can afford a one-week New Year’s vacation in (insert dream city/venue).
- Make your goal measurable and define your measures: You know you’ll need to find & book a vacation, save the money ($3000) within 9-11 months and ensure you can take time-off to take your vacation.
- Ensure your goal is attainable: You should control your goal (if you’re setting a goal for someone else you’ll likely fail). In this case, the vacation is for you and you can control the progress and outcome.
- Make your goal relevant or realistic: Although your goal should push yourself and your boundaries, it should be realistic. For example, saving $1,000,000 in year is likely impossible for most; however, increasing your savings by 1% each month might be doable and help you achieve great financial savings. As long as you have some sort of income (or other means of saving), saving $3000 should be doable.
- Define the amount of time to achieve your goal: Setting a deadline helps you define the milestones to meet your goal and helps hold you accountable. For example, if your goal was to save $3000 to take a dream vacation (at no particular time) you may or may not accomplish the goal. You might reallocate your savings that could be directed at your goal because there is no pressure to finance your vacation sooner rather than later. If the goal lingers on indefinitely you may lose interest or forget about it and never go on your dream vacation.
Using your SMART goal, let’s reverse engineer it and identify steps you need to take to accomplish your goal.
Goal: Save $3000 by the end of the year to take a one-week New Year’s vacation in (insert dream city/venue). Let’s further define your dates of travel: Dec. 27-Jan. 3. Identify mini-goals and a time-frame to increase success, such as:
- Save $3000 by Oct. 15 (or perhaps Nov. 15 if you plan to charge it and pay off in full before incurring interest) which means start saving TODAY!
- Officially request leave or time-off from work to take your vacation (if there is a chance you may not get the approval, make sure you do this before making your reservations) by Oct. 1.
- Book the vacation no later than. Oct. 15 (you may want to book sooner if you’re a planner or take a more laid back approach and see what last minute travel deals are available: entirely up to you).
- Make personal arrangements in your absence (pet car, mail hold, whatever your needs are) by Dec. 1.
Create your own time-oriented goal checklist to keep you on track of financing your goals:
- Monthly: Save $333/month ($3000/9 months); your best bet is to automate this savings and move it from your checking account into your savings account after every paycheck. If you get paid twice monthly, that’s $167. Alternatively, or in addition to your automated savings, you could also open a Digit Savings account to help you with your savings.
- Oct. 1: Get approval for your vacation.
- Oct. 15: Book your vacation. If you have enough time and are interested in travel hacking, you can look at earning and using award travel. I recently earned the Southwest Companion Pass which has helped us travel at a discount within the US.
- Dec. 1: Make any additional arrangements to maintain your household while you’re away.
Other things you can do in-between now and October:
- Brainstorm other ways to save (maybe sell some items on eBay, have a yard sale, pick-up a second job or start a side hustle).
- Research your vacation (destination, airlines, hotels, activities, car rental, etc.) so you know what you’re doing and have all the necessary details to make reservations (and ensure your savings will be sufficient).
- Check your monthly savings balance to make sure you’re on track and adjust your savings or vacation accordingly.
- Start thinking about the next vacation you want to take, make it a SMART goal and identify the mini-goals and timeline to get a jump start on your next trip!
If you set SMART goals and make a plan, you’ll greatly increase your ability to successfully achieve and finance your goals!
Find a way to finance your goals in 2017!
Get the latest posts & tips to help you finance your goals.