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Smart Money Moves from The Smart Millionaire

Smart millionaires use the SMART way to build wealth.

A consultant and former Director of Corporate Planning for Washington Water Power Company, George T. Doran, developed a goal-setting technique by SMART. SMART stands for specific, measurable, achievable, relevant, and time-bound.

Although George Doran developed the SMART technique to help corporations achieve their objectives, it is an excellent strategy to help you set and achieve any goal, including your financial goals.

How to set money goals the SMART way.


Setting money goals starts with a clear idea of what you're hoping to achieve. And, instead of only focusing on the goal, be clear about the outcome you want. Just saying you want financial freedom does not provide details about that.

If early retirement is one of your goals, be clear about the outcomes you want out of retirement. For example, is it to spend more time with the grandkids or travel for three months of the year?

Or maybe, you are thinking of early retirement because you hate your job. Early retirement may be the goal; the three scenarios with three different outcomes require three different approaches.

Along with clarity, be specific. What would a comfortable retirement look like if a comfortable retirement were your financial goal? A debt-free after-tax retirement income of $100,000? Or a $50,000 down payment on a home?


The goal should also be measurable. As in the example above, many people want a comfortable retirement. But that may mean different things to different people.

So how do you measure comfort? But a debt-free after-tax annual retirement income of $100,000 is specific and measurable.


Once you know the dollar value of your goal, decide if it is achievable. Take a look at all your sources of income. How much can you realistically commit regularly towards that goal? Be honest with yourself.

If you are currently living beyond your means, reduce your current expenses. Look at your bank or credit card statements for the past three to six months. Are there any "leakages" that you can plug in?

Such as unnecessary bank or credit card fees? What expenses can you eliminate or reduce? For example, instead of eating out three times a week, decide to do it only once weekly.

How much can you put away monthly or bi-weekly towards your goals?" Then, automate your contributions directly from your paycheck towards savings earmarked for your goals.

Whether it is a long-term money goal like a comfortable retirement or a goal you hope to achieve in six months, decide how much and how regularly you need to save to achieve these goals.

Maybe your most important financial goal is to pay off your credit card. However, have a SMART plan for debt as well.


We all have a long list of financial goals. But they don't" all take the same priority. For example, if you are in your twenties and just married, saving for the down payment may take precedence over a comfortable retirement. And if you have young children with a specific time frame for when they will need post-secondary education, then saving for that purpose becomes a high priority.

To make your goals achievable, narrow them down to three of the most important goals. Then, with finite resources, focus on what is of greatest urgency and most aligned with your values.

You may have children and believe they should be able to fend for themselves by eighteen. Saving for their education may not be a priority for you. It may not even factor in your list of money goals. A key element in setting money goals is ensuring they align with your values.


Knowing when you'd like to achieve your goal is also essential. In investment planning, this is called your time horizon. Your time horizon determines where and how you save or invest to achieve your money goals.

Money used to fund short-term goals requires different investments than that needed to achieve long-term goals.

Asset allocation is a strategy of investing different portions of money into varying asset classes. Depending on your risk tolerance, long-term goals require growth investments that generally produce a higher rate of return over the long term.

You would want the money invested in something safe for a goal you'd like to achieve within two to three years. Not in something volatile could cause your principal to drop substantially in the short term. And where there is not enough time to recover.

The SMART Way to Set Your Money Goals

Financial planning is about planning for the future and living in the moment. Setting money goals that are specific, measurable, attainable, relevant, and time-bound is a smart way to achieve them. And start now.

Two books I recommend to help you get and stay on track to achieve your money goals are Lynne Twist's "Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving…" and Tony Robbins' "Money: Master The Game. 7 Simple Steps To

Financial Freedom."

This article contains affiliate links. I may receive a commission from purchased items (at no extra cost).

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