SMART Goals for Tackling Debt

SMART goals

SMART Goals for Tackling Debt

Want to learn more about how to set smart goals? SMART stands for Specific, Measurable, Assignable, Realistic, and Time-Related. If you want to eliminate debt quickly, the experts at Pivotal Wealth can teach you how to use SMART goals and other debt reduction strategies to your advantage. 

How to Set SMART Goals

S = Specific

Sit down, look at all of your expenses, loans, and debt, then decide exactly what you want to accomplish financially in terms of debt repayment. Choose an amount that you want to pay off within a year. This amount could be specific to one loan or aim toward repaying your total debt. 

You might want to pay off a certain amount of credit card debt so that you can free up more money for paying off student loans or car loans. Once you set this goal, factor it into your budget to ensure you pay enough each month to reach your goal. 

M = Measurable

When you track your progress, it is easier to keep up your momentum when it comes to making payments. You can track your progress on paper, on a spreadsheet, on an app, or whichever way works best for you. Several apps feature goal-tracking components, and seeing this progress each month will encourage you to continue paying down your debts and working towards your goal. 

A = Assignable

This aspect can be extra important if you’re working with your partner to pay down a debt. By making things assignable, it will be clear where responsibility lies. Decide who makes a payment each month, how much each person will pay, and whether your goals will be separate or combined.

R = Realistic 

You might feel discouraged or stressed if you aren’t meeting your goals, so it’s important to make your goals realistic. Set goals that you can achieve with the resources already available to you. Make sure that your monthly debt payments aren’t taking too big of a chunk out of your paycheck. This will make your goal easier to pursue, you won’t feel like paying off your debt has a negative impact on your day-to-day life.

T = Time-Related

Setting a deadline will make it easier to achieve satisfactory results. If you’re moving so slowly that you can’t detect your progress towards your goal, you might be tempted to give up. Your timeline for debt repayment should be realistic based on your abilities and what you can do with the financial resources you have. 

Don’t base your timeline entirely on your desires. While it might sound great to have your debt paid off in under three years, that might not be a realistic goal given your situation. By budgeting and crunching the numbers on your expenses, you’ll be able to set an attainable repayment timeline.

Become Debt Free with Pivotal Wealth

If you want to learn more about how to set SMART goals, we can help! The experts at Pivotal Wealth will help you set clear financial goals, develop a customized money management system, create a debt reduction strategy, and cultivate a mindset of wealth. Contact us today to get started on your journey to financial freedom.

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Matt Lovelady is a co-founder and managing vice president of Pivotal Wealth. He has launched multiple businesses in the financial services space and is passionate about helping people become debt-free, build their wealth, and plan effectively for their retirement.