Financial Education

SMART financial goals for 2020 and beyond

Life is busy and it’s expensive. Much of the time, you’re likely thinking about the many immediate demands on your income. But to build your financial health, it’s essential to think about what you want your money to do for you in the future.

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What do you dream about?

Take some time to write down a few of your boldest dreams (you don’t need to get stuck on this – just one or 2 will do.) What do you imagine for your life? Finding a job you love? Raising a family? Travelling? Starting a business? Owning your own home? These don’t have to be the things that society or your family expect of you. These are the unique dreams that light you up, so get creative!

Although your dreams may not be things you can buy off a shelf, money will be an essential resource for turning them into reality. Whoever you are and whatever your circumstances, you’ll need to manage scarce resources – your time, your energy, and your money.

How long will it take?

Once you've written down what your dreams are, it's time to break them down into practical financial goals. Firstly order them into short-, medium- and long-term goals:

Short-term goals          Within 2 years  

Medium-term goals      3 – 10 years

Long-term goals           More than 10 years

Create SMART goals

Next you need to make sure your goals are SMART. SMART is an acronym – each letter stands for something, helping you to remember all the elements for creating a goal you can achieve.

SMART goals are:

Specific. Vague goals aren’t clear, you need to be specific about what you’re working towards. Write down exactly what it is, how much it will cost, where you will find it and what date you want to achieve it.

Measurable. How much do you need to save and how much will you save each month? This way you can measure your progress and see how you’re getting closer to your goal.

Achievable: Will you be able to consistently afford the amount you plan to save each month?

Relevant: Is this goal going to contribute to your bigger dreams?

Timely: Give your goal a timeline, with a start date (even if it’s a few years from now, after you’ve accomplished other goals), and the completion date you’re aiming for.

Examples of how to make your goals SMART

Goal: Repay debt

I'm going to pay R200 extra (Measurable and Achievable) into my clothing account every month (Specific and Relevant) to repay the account in 6 months instead of 8 months (Timely and Achievable).

Goal: Go on holiday

I'm going to save R3 300 towards a beach holiday by the end of this year. To do this, I will save R300 per month for the next 11 months.

Take the time to set out your dreams and your goals, and make them SMART. When you know exactly what you’re aiming for, it becomes much easier to take the daily actions and decisions that will get you there.

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