Family Finances – Establishing SMART Goals
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Hi friends! Thank you for visiting! Today I wanted to share with you another very important step towards taking control of your family finances: establishing goals. I am a marketer, so this is something I do before engaging my clients on any marketing initiative.
I learned about SMART goals awhile back and I thought that should be the only way anyone would go about setting up objectives. SMART goals are:
- Time bound
Here are some examples of what SMART family finances goals would look like:
Pay off debt
“To pay off 50% of our credit card debt by the end of the year” To be debt-free should always be your main goal. I don’t mean mortgage or car loan debt -we love those and you need them to create good credit history and have a good credit score- I mean credit card debt and other loans.
Start or add to a savings fund
“To save 15% of every paycheck ($___) for 12 months” No matter what your salary looks like, saving 15% of your paychecks is a goal that can be achievable by most debt-free families if there is discipline and drive.
“To reduce monthly expenses by 20% by the end of the year” Same as above, I think this is a goal that should be achievable by most debt-free family that are serious about their finances. I find it hard with kids, because we want to give them the best, and for them to do what their friends are doing, so they don’t feel behind and blah blah blah. But even with kids I believe this is achievable.
Save for retirement
“To max out our 401Ks every year” This one could be a little more difficult to some families because it involves saving about $18K per spouse per year towards something you won’t be able to use in many years. I see how this could be hard for some depending on your salaries and family needs, but if this is something you could do, I highly recommend it because many times employers match some of your contributions and that is free money we don’t want to leave on the table, plus a 401K is one of the most effective ways to save because your contributions are pre-tax.
Start or add to your investment portfolios
“To invest 2% of each paycheck for 12 months” This is my favorite type of goal. Actually, I started trying to invest 1% of every paycheck as a way to teach myself how to invest, the language, what portfolios perform better, etc. I am still learning, but as I get more confident I slowly increase that percentage.
These are just some examples, but you would have to sit with your spouse and together decide what SMART goals you should pursue this year. I would love to hear from you – so please don’t hesitate to leave a comment below or contact me with questions about this or any other topics!
Have a wonderful day!