Goals are plans of action. They are the things that you aspire to do and get your blood pumping just thinking about how to get there. Setting goals is one of the most crucial, if not the most crucial, steps in doing something you would really like to accomplish in your life.
Setting and reaching goals can be one of the most fulfilling things you can do in life. It doesn’t matter if it’s financial goals, personal goals, or even career goals. Many researches have just found that setting, planning, and reaching goals are key ingredients to living a more fulfilling life.
Just wishing to do something isn’t going to get you on the road to success. To hop on the fast track to getting out of debt you need to set goals. The key thing to do when thinking about goals is setting SMART goals. No, that’s not calling your goals dumb. SMART goals are goals that are
S : Specific
Let’s break each of these down to help you understand them a bit better. The “s” in SMART goals is for specific. You need to have a pretty specific idea of what you would like to accomplish. Just telling yourself “I would like to pay down my debt” really doesn’t give you a good picture of what it will take to meet your goals. Are you talking credit cards, student loans, medical bills? Or are you talking all of the above. Be specific! A specific goal would sound like this
“I would like to reduce my credit card debt overall.”
This statement tells you exactly what your goal is, and what you are hoping to accomplish! There really isn’t any gray area, so you can tell if you hit your goal or not.
The “m” stands for measurable. This one is a little tricky because its really only talking about measuring the goal itself, not the time frame. That is coming up later. If you don’t know where you started or how much progress you want to make on your goal it’s really hard to see if you have accomplished what you set out to do. Let’s make our previous goal measurable!
” I would like to reduce my credit card debt 10% overall.”
Now you know exactly how much you need to reduce your debt to meet your goals. If you owe $1000 on your credit cards all together, if you get it down to $900 you have hit your goal! $900 is a concrete number you can shoot for! It’s not something floating around in outer space!
The “a” stands for attainable. This is one part of goal setting that I think is the most important to understand, and it does take a little more insight and practice to get this one right. You want to make your goals something that you can actually reach. If you set your goal to be to get out of debt in 6 months, and you are $20,000 in debt, unless you hit the lottery that goal really isn’t attainable.
On the flip side, you want to challenge yourself as well. If your goal is to get out debt, you wouldn’t want to say it would be great to be $5 less in debt. Yeah, you can hit that goal, but is it really helping you in the long run. Cheating yourself really doesn’t sound like a fun way to get things done.
So is “I would like to reduce my credit card debt 10% overall” attainable? At this point, we don’t know because we haven’t set a time frame, but it sure seems like it’s something that shouldn’t be too hard to accomplish.
Now onto the “r”. “R” is for realistic. This one is pretty closely related to the attainable part of goal setting. It’s great to shoot for the moon, but you want to have a realistic idea of the situation you are in, and if your goal is realistically something that you can reach. In the world of weight loss, it wouldn’t really be realistic to set a goal to lose 100 lbs in a week. Even if you didn’t eat all week it’s pretty much physically impossible to meet a goal like that! Just be honest with yourself on this one. Setting goals is supposed to help you develop an action plan, not set you up for failure.
Lastly, “t” is for timely. Setting a time frame is crucial! You don’t want the timeframe to be too long so you lose sight of what you are trying to complete, but you don’t want it so short that there is no realistic way for your to achieve your goal. Now make your debt goal have a timeframe.
” I would like to reduce my credit card debt 10% overall in by August 17, 2012″
Notice there is put a specific date. It would be too easy to just keep rolling the goal plan back if I had put in six months, and where’s the progress in that. Don’t take that to mean that you have to be rigid and pass/fail in your thinking. Just hold yourself accountable, but at the same time understand that life does happen and you might have to reset your goal if something does interfere with your plan.
Go ahead, challenge yourself. Set those SMART goals! That is the next step to getting a little bit closer to Couponing Your Way out of Debt.