In her book “Rich Enough? A Laid-Back Guide for Every Kiwi,” “New Zealand’s Most Trusted Money Expert” Mary Holm talks about setting goals and achieving them. She uses the SMART acronym, but changes up one of the letters for her theory.

SMART goals are:

• Specific
• Measurable
• Achievable
• (w)Ritten
• Timebound.

SMART Goal Definitions

Specific has to be more than “I want to pay off my debt.” It should be which debt you want to pay off first. She recommends, “I want to pay off the debt of my highest interest rate loan or credit card.” That will give you a specific amount to shoot for while providing you the best results for your efforts.

Measurable means you know how much you want to reduce it by: $50 a month, or $100 a week, or something that uses a number so you can measure the results.

You want this number to be achievable. Setting a goal that you can’t reach will demoralize you and cause you to quit trying. If you bring have $500 a month after rent and other bills, trying to reduce your debt by $1000 a month isn’t going to happen; $400 might be a reachable goal depending on your discretionary spending and what you’re doing with your savings habits.

Holm’s says that by writing the goal down and posting it to your fridge or someplace you’ll see it often, you’ll be more motivated to achieve the goal. (Most SMART theories use “Relevant” for the “R.”)

Timebound means that you’re giving yourself a deadline to reach your goal. Two months, two years, whatever it is make it reasonable. If you have a $4000 debt and you’re paying $400 dollars on it a month, 10 months would be a reasonable goal; three months would not. This should be just challenging enough to be motivational.

Missing a Month

Life isn’t always predictable, and there’s a chance that you’ll miss a payment or two. Don’t try to double up as this will become demotivating quickly. Instead, achieve the goal in the next time period and realize you’re human.

Using the principles of SMART goals can help you achieve more than your financial goals. However, starting with your finances may increase your confidence and ability to accomplish other goals. Read what Mary Holm says about the Wealth and Happiness connection.