Can SMART Financial goals make you more responsible with money?
Posted on March 14, 2023 by Richa Puri, One of Thousands of Money and Finance Coaches on Noomii.
Keep reading to find out if 'not defining your financial goals properly' is the reason behind you not being responsible with money.
My earlier post on goal setting explained ‘how well-defined goals aka SMART goals provide a strong foundation to your financial plan’. (Check my blog on my website to read my earlier post on SMART goals)
However, that’s just one side of the coin – the mechanical impact of setting smart goals in securing your financial future.
Today, I want to shed light on another side of the coin, i.e., ‘How SMART goals make your money decisions more responsible’, which is the emotional impact of having SMART goals.
For example -
Imagine a situation when a friend comes over and tells you about this really amazing opportunity of doubling your money in 3 years. If you don’t know whether you will have enough money when you need, the news can cause excitement. Leading to an erratic decision of investing your money in something without assessing it. Such decisions can easily result in panic or regret later on, when you realise what kind of risk you have taken with your hard earned money.
Does defining your financial goals really have an emotional impact on you?
Yes, impact of SMART goals goes well beyond organising your finances for future. Their impact starts from today, on your everyday behaviour with money.
What are SMART goals – the goals that are well defined using the SMART framework i.e. specific, measurable, attainable, relevant & time-based.
How SMART goals affect your life?
1. Allow you to save/ invest for future without crushing your present
2. Aligned with your & your family’s priorities for future
3. Make you feel secure as you are ready for various eventualities
4. Help avoid panic/ anxiety as your enough is defined
How above things impact your state of mind when dealing with money – absence of panic/ anxiety in your financial life prevents short-sighted financial decisions, that are made in a state of excitement or panic.
Because excitement & panic both shut down your rational brain.
SMART financial goals help to keep your rational brain switched on at all times. This leads to a balanced financial decision even in extreme situations.
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