Setting Goals the SMART Way

Have your good intentions for the new year already been blown into oblivion like litter on a lonely highway? Has your once-exciting vision of a brave new you somehow faded to uninspired business-as-usual? Well, it could be that you just didn’t set yourself up for success. Before the year is too far gone, let’s look at how to approach goal setting in a way that could allow you to make course corrections and turn 2013 into your lucky year.

Fortunately, we don’t have to reinvent the wheel. We can use the concept of “S-M-A-R-T” goal-setting. It’s something I’ve heard about over the years. But until I did some digging, I didn’t realize it dated all the way back to the mid-1950s and Peter Drucker’s book, “The Practice of Management”. Here, I’ll apply that approach to the No. 1 financial goal I’ve regularly encountered over the years, the veritable Cadillac of resolutions: “I want to get out of debt.”

Let’s examine how this seemingly perfect resolution often fails, and what you can do to get it right using the S-M-A-R-T method.


The usual problem: The “get-out-of-debt” intention is good, but it’s certainly not specific. Are you talking about your mortgage, car loans, student loans and credit cards, or just one or the other? What are you really trying to accomplish?

The fix: Be laser-focused. Identify a specific debt you want to tackle or a dollar amount to attack.


The usual problem: You can’t measure what you haven’t defined. With the first step done, however, you now have a clear goal that you can measure. If, for example, you want to shed $5,000 in credit card debt by the end of the year, you’ll be able to map out a plan with periodic benchmarks to track your progress.

The fix: Map it out. I’ve built dozens of spreadsheets specifically designed to help clients measure progress toward financial goals. But your plan doesn’t have to be that complicated. Simply write your goal down and post it on the fridge. Just make sure you don’t ignore it each time you reach for a cold one.


The usual problem: Letting your enthusiasm overtake your realism. Is the general notion to get out of debt attainable? For most folks I know, it is — but not right away. Don’t put your goal in jeopardy by biting off more than you can chew.

The fix: Focus on the bite, not the meal. Remember the saying: “How do you eat an elephant? One bite at a time.” Apply that logic to your debt reduction goal. Instead of trying to eat the entire debt elephant, focus on just one piece, one bite at a time.


The usual problem: Incorrect focus. Why did you get into debt? Maybe it wasn’t a one-off medical situation or an isolated bad decision, but rather habitual overspending. If that’s the case, getting out of debt might not be the right goal.

The fix: Work on causes, not effects. Switch your goal to one that focuses on monthly spending control and adherence to a budget. That way, you’re more likely to have lasting success.

Time Bound.

The usual problem: No specific time frame. If you’re like me, you work better with a deadline. And, guess what? Your goals do too!

The fix: Set a date to get the task at hand knocked out as part of your new goal-setting process.

So, if the shoe fits (or perhaps fell off), why not start over? This time with carefully thought-out and constructed goals, you’ll have a better shot at success.