The most common complaint about setting a budget is that it’s difficult to stick to in the long run. This is undoubtedly true if you view your budget, or spending plan, as a necessary evil rather than a road map to financial freedom.

It’s important to consider your current needs vs wants in your spending plan to prevent yourself from getting frustrated by possible cuts. However, equally important is knowing why you are keeping tabs on your finances. For this reason, you should incorporate clear financial goals in your spending plan. If you are sold on a particular financial goal you might even find yourself viewing your needs vs wants debate in a different light.

How do you set financial goals that will inspire you to stick to your spending plan through the tough times? By making them SMART, or Specific, Measurable, Achievable, Realistic and Time-based.


Your financial goals have to be specific so you can incorporate them in your spending plan. How will you reach your destination if you do not know where you are heading? Wanting to pay off your debt, travel, buy a house or invest in your child’s tertiary education are not specific goals. A specific financial goal is “I want to start my own business in October 2019 and I need to save R50,000 to do so”.


Your financial goal has to be measurable. You need to be able to quantify your goal, for example saving R50,000 to fund your business or paying off your debt of R100,000.


In general, the question of whether goals are achievable deals with whether the goal is possible in terms of your ability. A goal must stretch your ability to keep you interested, but it’s only a short hop from an intriguing goal to a demoralising one. For example, I have two left feet firmly and clumsily planted on the ground, so a goal of becoming a professional dancer would only lead to disappointment.

With regards to financial goals in particular, your goal might be to save R600 every month by bringing lunch to work instead of buying lunch each day. This is an achievable goal if you are currently spending R30 a day on lunch over 20 days. However, is it a realistic goal?


While your goal to save R600 each month by changing your lunch strategy is achievable, it might not be realistic. You might have cheat days where the weight of the world is only lifted by Krispy Kreme, or you might have an evening event that prevents you from packing a lunchbox for the following day.

Your financial goal has to be realistic in the context of your life and other financial obligations. Importantly, it has to be realistic to you. Everyone’s circumstances are different, so a financial goal that is realistic to me might not be realistic to you. Do not try to emulate others in your financial goals.


Most of us perform best when faced by a looming deadline. Attaching a date to your financial goal not only allows you to measure its success at the finish line, but also to plan your road leading to this point. If you have to save R6,000 in six months, you know you need to save an average of R1,000 a month.

Having financial goals that are SMART and that speak to you will motivate you when your spending plan becomes a drag. Such financial goals also apply to your financial life beyond your spending plan, including investments and policies. You have to know exactly what you are trying to achieve so you can determine the appropriate strategy and verify its success.

If you would like assistance setting SMART financial goals, get in touch for a cup of coffee.