Setting your financial goals
Now let’s identify some specific financial goals based on what is most important to you.
You are more likely to reach your financial goals if they are SMART goals:
Specific: When setting a goal, be specific about what you want to accomplish. Think about this as the mission statement for your goal.
Measurable: When setting a goal, think about how you are going to determine if you meet it. This makes a goal more tangible because it provides a way to measure progress.
Achievable: When setting a goal, think about how to accomplish it and whether you have the tools/skills needed. Consider what you can do to make your goal possible and determine if you need to develop new skills.
Relevant: When setting a goal, consider why you want to reach it. Make sure it aligns with what is important to you.
Time-Bound: When setting a goal, decide on a realistic deadline for achieving it. Make sure you are patient when working toward achieving your financial goals.
It is important to be realistic with yourself. By being too ambitious, you may risk not meeting your goal and therefore becoming discouraged.
SMART goal example
“Having financial security” is a very vague goal and is hard to measure. How will you know if you are making progress or if you have achieved your goal?
“Saving $75 each month over the next five years, for a total of $4,500 into a savings account for an emergency fund” is a SMART goal.
It’s Specific: You know exactly what you are savings for (an emergency fund).
It’s Measurable: $75 each month, totaling $4,500.
It’s Achievable: Is $75 each month achievable for you?
It’s Relevant: An emergency fund helps you obtain financial security.
It’s Time-bound: You have a monthly target of $75 and a five year target of $4,500.
Debt-trap: a situation in which a debt is difficult or impossible to repay. This is often due to high interest payments, which make repayment impossible. Payday loans, for example, often lead to a debt trap. A payday loan is an amount of money borrowed at a high interest rate which the borrower agrees to pay back to the lender when the borrower receives their next paycheque.
A great way to reach longer-term goals is to break them down into shorter-term goals. Breaking up your longer-term goals into multiple shorter-term goals makes it easier for you to measure your progress.
Financial goal-setting tool
It is now time for you to set your own financial goals!
Please download the interactive financial goal-setting tool. Take a look at the list of financial goals and identify the ones that are most important to you.
Select and prioritize your top three post-insolvency financial goals and fill in the blanks with your personal goal information. If you cannot find three goals from the list which are important to you, use your own, but make sure they are SMART.
Bring your list of financial goals to your in-person counselling session. You will discuss your financial goals and set a plan to achieve them with your counsellor.