Setting SMART Financial Goals

Managing your money wisely is the best way to make sure you and your family gain financial security.  Money managient is also extriely important if you own a business.  All business owners need to understand how money comes in and goes out of their business-if you ignore budgeting details, your venture might not be successful.  There are many similarities between budgeting for yourself and budgeting for your small business.  When you understand the basics of money managient for yourself, you will be more prepared to set up a budget for your company.

To manage your money wisely, start by setting financial goals and establishing a budget plan to help you achieve those goals.  Financial goals are simply statients about things you wish you could afford; for example, you may have a goal to establish an iergency savings fund of $2,000 by the end of the year. 


What are your personal financial goals?  If you had $2,000, what would you do with it?  Would you invest it in your small business?   Would you buy a car?  Would you make a home improvient?

You will be able to accomplish your goals if you manage your finances and put money aside on a regular basis.  The key is to setting financial goals that are Specific, Measurable, Attainable, Realistic, and Trackable (SMART):

• Specific. State exactly what you want to achieve, how you're going to do it, and when you want to achieve it. For example:

General Goal Statient:   I want to improve my finances.


Specific Goal Statient:   I want to pay off my credit card bill in 8 months by negotiating a payment plan with my creditor.

• Measurable.   A financial goal should be measurable so you know when you have achieved it.

General Financial Goal Statient:   I will pay off most of my credit card debt soon.


Measurable Goal Statient:   In the next six months, I will pay three of my five credit card bills in full.

• Attainable. Make sure the financial goal is within reasonable reach.

General Goal Statient:   I will save money.


Attainable Goal Statient: I will save $1,000 in a year by putting aside $3 each day.

• Realistic. Is the economic goal realistic for you? Don't ignore your limitations. Your economic goals need to be tasks that you can reasonably accomplish. 

General Goal Statient:   By managing my money well, next year I will become a millionaire. 


Realistic Goal Statient:   By managing my money well, next year I will be debt free and will have an iergency fund equal to three months of living expenses.

• Trackable. Being able to track your progress encourages you to keep going and reach your fiscal goal.

General Fiscal Goal Statient:   I will increase my savings goal every year.


Trackable Statient:   Each year I will save 10 percent more money than the previous year.

If you are SMART about setting financial goals, you will be well on your way to managing your money in a way that will provide financial security for you and your family for years to come.

For more helpful tips about managing your money and to improve your financial literacy, visit Your Money and You (http://yourmoney.accion.org).

This article was provided by ACCION USA (http://www.accionusa.org). ACCION USA provides business loans up to $25,000 to small business owners who need financing to expand their businesses.