New Year Resolutions: Set Smarter Financial Goals for 2019

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New Year resolutions: Make smarter ones using SMART goal setting

Getting your finances together for 2019 as part of your New Year resolutions is an admirable goal, but to make it happen, you need a plan that you’ll actually follow. This is where most people freeze up. Where do you even start? Are these goals actually achievable? How much do you have to sacrifice to make this happen?  

If this sounds like you, your New Year resolutions for 2019 are probably too broad and vague. What you need is to transform them into S-M-A-R-T goals.

What is SMART Goal Setting?

SMART is an acronym for Specific, Measurable, Attainable, Realistic, and Time-bound. Planning your goals with these 5 traits in mind makes them more achievable.

Compare the two sets of goals below. The general goals simply tell you what you hope to achieve, without any steps on how to do it. The SMART goals provide you with measurable targets in terms of a dollar amount and a time period.

Let’s focus on the 5 traits of SMART goals and how you can use them for your own financial goals.

S: Specific

What exactly do you want to achieve? Describe your financial goal and objective in detail. The more specific your description, the greater the chances of success.

Your SMART goal must address the 5 W’s:

WHAT: What are you trying to accomplish?
Write down your goal in 5 words or less. You get more clarity when you state it in as few words as possible.

WHY: Why this goal?
Understand how your goal fits into the bigger picture of your life. If your financial goal isn’t in line with what you want from your life, you’re going to have difficulty following through with it. You need to find out how your financial goal fuels what you truly want.

WHERE: Where will you be working on this goal?
It’s important to consider where you intend to achieve your goals. Planning your finances while you live in Singapore requires a different strategy from planning your finances while living in the UK.

WHO: Who is working on this goal?
This is an important question for goals that require the participation of others. For example, if you’re planning to save for a wedding, your partner will be involved in it. Thinking of the “who” question considers how your partner’s participation will make or break this goal

WHICH: Which limitations should you prepare for?
It’s worthwhile to consider limitations and constraints that can get in the way of your goal. This helps you figure out alternatives to reaching the same outcome.

M: Measurable

A measurable goal has a target that you can measure. The idea is that target helps you determine how far you are from reaching your objective.

Measurability lets you ask: How do I know if my goal has been reached? The finished line needs to be as clear as possible, and the way to do that is by setting a dollar amount you can measure anytime.

Figuring this out is as simple as asking “How much?” How much do you need for retirement? How much will your wedding cost?

A: Achievable

Improving your financial health requires a goal you can realistically achieve. Looking at achievability shows positive changes from your current state.

Research is critical for planning achievable goals. Crunch numbers to see if the goal is actually possible.

For example, paying off a $2,000 loan by next month is not achievable if you only earn $3,000 and have a child. Instead, setting a goal of paying a $2,000 in 6 months is easier to achieve.

As you do your research, you’ll discover that making a goal achievable requires small adjustments. It could be as simple as extending your time frame or lowering the target amount.

R: Realistic

“Realistic” is the cousin of “achievable”. A realistic goal is one that fits in with your current income and resources, without sacrificing your financial obligations.

For example, it might be achievable to save $10,000 for a holiday in Europe, but is it realistic when you’re married with two kids and a mortgage? Not quite.

To ground your goal in reality, consider the impact on other people in your life who are relying on the same financial resources your goal will eat up. When you spend money for travel, you take it away from the family budget. Is this a realistic option?

Start by making a list of people who might be affected by this goal. Are they willing to cut back on certain things to meet this goal? Are you going to be happy making sacrifices to achieve it?  

T: Time Bound

Great financial goals are time-bound, which means they must be completed within a specific time period.

At this point, you need to ask yourself a sixth W: when? By when do I want to achieve this goal?

Setting a time frame forces you to find ways to make your goal happen. Ask yourself:

  • What can I do to achieve this goal before 2018 ends?
  • What can I do today to achieve this goal?
  • What can I do this week to achieve this goal?
  • What can I do this month to achieve this goal?
  • What can I do in 12 months to achieve this goal?

3 SMART financial goals for 2019

Time to put all this theory into practice! Here are some examples of how to translate financial goals into SMART goals.

Goal #1: Save money for a flat

You and your partner have some serious planning to do if you’re aiming to save for your flat’s down payment. Consider combining your income to figure out how much you can comfortably set aside.

Specific: My husband and I want to buy a 4-room flat in Yishun
Measurable: We need to save $34,000 for the HDB loan’s 10% down payment
Achievable: With a combined monthly income of $6,000, this is an achievable goal
Realistic: Can we comfortably achieve this goal given our current incomes and financial obligations? Is it something my husband is truly on board with?
Time-bound: My husband and I will save $3,000 a month until December 2019.

Goal #2. Clear unsecured debt

Paying off unsecured debts is a great goal, but you need to make it SMART.  Use a debt calculator to help you determine what’s attainable and realistic.

Specific: My wife and I will pay off all of our unsecured debts.
Measurable: My wife and I will pay all of our unsecured debts down to $0 from the current balance of $5,000.
Attainable: With our combined incomes and tools like debt consolidation plans, this is achievable.
Realistic: Can we qualify for a personal loan? Even if we don’t, can we still make progress on paying off our debts? What things do we need to cut back to achieve it?
Time-bound: My wife and I will pay off our $5,000 debt by July 2019.

Goal #3: Boost retirement savings

Depending on the lifestyle you want when you retire, your CPF may not be enough to cover your expenses. The earlier you make SMART retirement goals, the more time your savings have to grow.

Specific: I want to supplement my CPF with additional retirement savings
Measurable: I plan to contribute 10% of my monthly income to a retirement savings plan.
Attainable: Even with CPF deductions, this is an attainable goal
Realistic: Can my household finances survive if I contribute 10% of my income after CPF deductions? What lifestyle changes do I need to make it work? Am I willing to make those changes?
Time-bound: This week, I will do research on retirement savings plans and sign up for the best one so I can begin contributing to it by January 2019.

What SMART goals are you setting for 2019? 

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Lauren Dado

By Lauren Dado
Lauren has been a content strategist and digital marketer since 2007. As’s Content Manager, Lauren edits and publishes personal finance stories to help Singaporeans save money. Her work has appeared in publications like Her World, Asia One, and Women’s Weekly.