One of the first things you should be doing if you want to attain financial freedom in the next decade is to set long-term financial goals. Together, your long-term goals will form a blueprint for saving up for what you want in life and motivating you to stay disciplined about managing your finances.
Admittedly, however, it can be hard to think of the right long-term goals, let alone how to achieve them. If this is your dilemma right now, consider using the SMART criteria—SMART standing for Specific, Measurable, Attainable, Relevant, and Time-bound—as a starting point for your financial objectives.
With a framework like SMART and the right avenues for managing your personal finances, for example, a Maya Time Deposit Plus account or features like Maya Personal Goals, it can be surprisingly easy and intuitive to save money for the far-off future. Here are some tips for adapting the individual pillars of SMART to your savings plans and being relaxed, yet purposeful about your long-term financial goals:
1) Be Specific About Your Goal
Clarity is key when setting financial goals and committing to them. Being specific means defining exactly what you want to achieve and intentionally working towards that.
Instead of a vague goal like “I want to save money,” for example, specify the purpose of the savings and exactly how much you’d like to save. Try setting a benchmark goal of PHP 250,000 on your online digital banking account for a down payment on a car or a house. This specificity will give you a clear target and help you stay motivated enough to save. When you know exactly what you’re working towards, it becomes easier to develop a plan to achieve it.
2) Make Your Goal Measurable
Measuring your progress is crucial to staying on track. Ensure your goal has clear criteria for tracking progress and success.
For example, if your goal is to save for retirement, you could set a target of saving PHP 3,000 per month. With set increments like these, it will be easy to measure your progress each month and make adjustments as needed. Measurable goals will also allow you to celebrate milestones along the way, which can keep you motivated and committed to your long-term objective.
3) Ensure Your Goal is Attainable
An attainable goal is one that you can reasonably achieve given your current financial situation. It’s one that considers where you are financially at the moment and whether it’s possible to attain your goals given your current resources and financial trajectory.
Be practical about what you can save up for given constraints like time and how much you have to put away for short-term expenses. Choose an attainable goal that can keep you motivated and, at the same time, not put you at risk of abandoning your financial plan.
4) Break Down Larger Goals
In connection with the tip above, remember that large financial goals can feel overwhelming, and that it’s natural for you to feel intimidated by them at first. Try breaking significant goals down into smaller, more manageable tasks to make them feel like they’re easier to achieve. Breaking down goals also helps you make adjustments as needed, ensuring that you stay on track.
5) Keep Your Goal Relevant
Your long-term financial goals should always align with your broader life objectives and personal values. A relevant goal is one that makes sense within the context of your life.
For example, if financial security is important to you, set a goal to build an emergency fund of PHP 100,000. Focus your efforts on what truly matters to you and what initiatives will support your overall financial well-being.
6) Set a Time-Bound Deadline
A deadline will create a sense of urgency around achieving a long-term goal, so you may want to set a specific timeframe for one. For example, you might set a goal to save PHP 350,000 for a down payment on a house. Give yourself a deadline of five years and look for the best avenues to save up across that period, for example, a Maya Time Deposit Plus account that will allow you to earn more interest on your deposit the more you add to it.
7) Use Financial Tools and Apps
Technology can simplify the process of managing your finances and helping you clear long-term financial goals. Use budgeting apps, digital bank accounts, and e-wallets to track your progress and stay organized.
Maya, for instance, offers a consumer savings account program with higher-than-average interest rates of up to 15% p.a. that allows you to boost your interest rate as you keep using the app. Using features like Maya Personal Goals will allow you to set particular savings goals, visualize your financial progress, and perhaps even achieve your financial objectives thanks to its high interest returns of up to 4% p.a.
8) Review and Adjust Regularly
Your life circumstances can change, and your financial goals should adapt accordingly. As such, you should regularly review your goals to ensure that they remain relevant and attainable to you. Periodic reviews allow you to assess your progress, celebrate achievements, and make necessary adjustments.
For example, if you receive a salary increase, you might decide to increase your monthly savings goal. This could be a good move on your part considering that your raise may also mean a change in your standard of living.
9) Stay Motivated
Keep yourself motivated by visualizing the end goal and celebrating particular milestones. If your goal is to save for a dream vacation, create a vision board with images of your desired destination. Each time you reach a savings milestone, reward yourself with a small treat or experience. Maintaining this kind of motivation will help you stay committed to your goals and make the journey more enjoyable.
As seen from the tips above, the SMART method can be a highly effective one for setting long-term financial goals—just so long as you know how to adapt it to your situation. Use it to make a savings plan, and you’ll be surprised at how easy and manageable it will be to take control of your financial future.
