How to Set Money Goals You Can Reach

Using the money you save

You should only touch the money in your savings account for specific reasons:

1. You want to pay for something you were saving up to purchase.
2. You have an unexpected expense that you can’t cover with the money in your regular spending account.
3. You’re taking it out of savings to invest it somewhere so it can grow faster.

Smart Money Tip: Don’t drain your savings

You want to avoid taking all of the money out of your savings account. Otherwise, you won’t have money to cover emergencies that could come up.

So, let’s say you want to purchase something that costs $100. You have $100 in your savings account. Instead of making that purchase now, wait until you have $150 saved up. Then take out the $100. That leaves you with $50 to cover unexpected expenses.

What is a SMART Goal?

The best thing about saving money is that you can use it to achieve goals. But setting a rough, general goal isn’t enough. Your goals for your money need to be SMART.

SMART stands for:

• Specific
• Measurable
• Achievable
• Realistic
• Time-bound

Basically, SMART goals help you make a plan to achieve a specific goal in a set amount of time.

How to set SMART goals

To set a SMART savings goal:

1. Do some research to find out what the goal will cost.
2. Decide when you want to achieve the goal.
3. See how much you need to save each month to reach the goal in that time.

For example, let’s say that you want a new bike. Your parents want you to pay for it on your own.

• It costs $200.
• You make $20 per week from chores.
• You also babysit two times a month and get $40 each time.
• That would mean your total monthly income is $160.

You want to purchase your bike in four months. That would mean you need to save $50 per month to reach this goal.

So, your SMART goal would be: I will save $50 per month, so I can purchase a $200 bike in four months.

Smart Money Tip: Set 3 SMART goals now

Take some time to think about the financial goals that you have right now. Come up with three things you’d like to save up to buy or do. Do some research to find out how much they cost.

Now hit the button below to download a SMART goals worksheet. Follow the steps above to make three SMART goals for yourself.

As you set your goals, decide how you want to accomplish them.

• If you want to tackle one goal at a time, you can save up more money for each goal. Then once you achieve it you move on to the next goal.
• If you want to do everything at once, you will need to save a little money for each goal. It will take longer to reach each goal, but you might get to all three goals faster.

This is what we mean by “achievable” and “realistic” in SMART. You need to be able to prioritize things you want and balance saving for goals with other expenses you might need to cover.