How to Save Money with SMART Goals

I’m a big fan of goal setting. I’m sure you are, too. We all set goals for ourselves in life, whether they’re personal or professional. For example, you may want to own a house or get married one day.

While goal setting on its own is helpful, it has its limitations. Mainly, if you only say that you’d like to achieve a goal “one day,” the likelihood of achieving that goal is a lot less likely. To help improve your chances of achieving a goal, it helps to set one that’s SMART.

In this article we’re going to look at SMART goals. More specifically, we’re going to look at how to save money with SMART goals. Let’s start by taking a closer look at SMART goals and what each letter means. We’ll finish off the article by looking at why SMART goals are effective and how to apply them to your finances.

What are SMART goals?

“SMART” stands for Specific, Measurable, Achievable, Relevant, and Time-bound. The principles can be applied to any goal you want to set. Organizations commonly use SMART goals in the business environment when setting business goals. SMART goals especially come in handy for project management.

In case you’re wondering why I keep capitalizing the word “SMART,” it’s because it’s an acronym. SMART stands for Specific, Measurable, Achievable, Realistic and Time-bound. SMART goal setting has been around since 1981 when it was mentioned in an article written by George Doran and has evolved over the years.

While goal setting on its own is fine, by setting SMART goals, you can drastically improve your chances of setting and achieving goals and seeing financial success.


The “S” in SMART stands for specific. Saying you’d like to have a lot of money one day is not enough. How much is a lot of money to you? How much do you need and for what? Will you have debt too? Ask yourself as many questions as possible to assist in becoming crystal clear on how much money you need and why.

  • Do you need money for a specific spending occasion?
  • What expenses do you have to consider now?
  • What future costs must you consider?
  • What sort of job and lifestyle do you have/want?

By setting a specific goal, it can help motivate you to achieve it that much sooner. It can also help you to see how close or far you are from realizing your dreams.


A measurable goal is one where you can clearly define meeting the goal. For example, if you’re saving towards a family vacation, you can clearly see your progress. If you need to save $5,000 and you’ve saved $2,500 so far, you’re halfway there. By seeing your progress and measuring it, it’s a good way to keep yourself accountable and to provide further motivation. Place a value or quantity to your goal so that you can measure how close or far you got once it’s time to judge your progress.


An achievable goal is one that you can realistically attain. For example, if your goal is to be completely debt-free but you are $100,000 in debt and poorly managing your money, it’s not likely you will do so on your first attempt. However, if you instead aim to knock out $1,000 first, you have an achievable and manageable goal to go after. Setting and surpassing smaller, achievable goals makes your chances of success a lot higher. It also helps to create momentum and builds inspiration to keep going.


The “R” stands for relevant or realistic. A relevant or realistic goal, simply put, is one that matters to you. For example, if you work in human resources, setting smart objectives in terms of sales quotas wouldn’t make a lot of sense. However, if you’re in telephone sales, that’s when setting objectives like that makes a lot more sense. If you want to save money, relevant goals could include:

  • Spending less on nonessential items
  • Using less energy or water to reduce bills
  • Selling items you no longer use


“T” may be the last letter in SMART goal setting, but perhaps it’s the most important. Time-bound involves setting a time frame to achieve your goals. Instead of saying you’d like to accomplish a goal “one day,” you’ll choose when exactly you’d like to achieve it. By setting a time-based goal, it encourages good time management. Set the due date as well as check-in dates along the way to ensure you are moving ever closer to your goals.

Why use this approach?

Have you ever set a goal and failed to achieve it? I think we’re all guilty of that. A common New Year’s Resolution is to get into better shape. People rush to join the gym in January, but by the time February rolls around, many of these same people who were so motivated to hit the weights haven’t stepped foot inside the gym since the day they joined. To avoid a situation like this it’s best to set SMART goals.

By setting SMART goals, not only are you helping improve your chances of success, you’re holding yourself accountable to the person that matters most – you.

How to Apply SMART Goals to Your Finances

While SMART goal setting is handy in your career, where it really shines is in your finances. Many of us struggle to achieve financial goals whether it’s short-term goals like saving for a family vacation, midterm goals like saving for a home and long-term goals like saving towards retirement. By setting and applying SMART goals to your finances, you can turn those struggles into successes.

Let’s take a look at a SMART goal in the context of saving for a home.

Specific: My goal is to purchase a two-story house in Calgary.

Measurable: I’ll automate my savings by setting up a preauthorized savings plan at my bank. I’ll monitor my progress on a monthly basis.

Achievable: I’ll save $400 per semi-monthly paycheque in a high-interest savings account.

Relevant: By setting and achieving this goal, I’ll get my foot in the door of the Calgary housing market and start building equity.

Time-bound: I will save up a down payment of $30,000 in three years.

Saving a down payment can seem like a daunting task, but by setting a SMART goal, suddenly the impossible seems achievable.

While SMART goal setting is a powerful technique on its own, you can take it a step further by writing down your SMART goals and monitoring them. For example, if you set the above goal of owning a home, but you don’t write it down, there’s no one holding you accountable. However, if you write it down on a piece of paper and post it on your fridge at home, it’s going to be staring you right in the face every time you go into the fridge.

By setting SMART goals and being committed to achieving them, you’ll be able to save money and pay off debt sooner than you could have ever imagined.

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