The Money Mindset
9 Developing Smart Financial Habits
Skilled trade workers have the luxury of earning an income while learning the specified craft. Therefore, there is usually less student debt for graduates of trade programs over those who attended a traditional university degree. This is already a substantial advantage, completing certification while earning a living wage.
Making S.M.A.R.T. Goals
Many individuals may feel overwhelmed and do not know where to start in regards to money. Making financial goals will assist in providing a sense of direction, and put you on track towards a strong pathway taking control of your money situation. Creating S.M.A.R.T. financial goals is a way to provide a starting point as part of the financial independence journey. S.M.A.R.T. goals are an acronym which stands for Specific, Measureable, Achievable, Relevant, and Time-Based.
S – Specific
Financial goals should be specific enough to be effective. They should outline what exactly may be accomplished or the action steps taken to see completion.
M – Measurable
Financial goals should have a criteria for being quantified, so that progress can be tracked and know when it has been completed
A – Achievable
Financial goals are meant to have a motivational aspect and stretch people to new heights. Thus, they should be attainable with the knowledge, skills, and resources available.
R – Relevant
Financial goals are supposed to align with a broader scope, such as becoming financially independent or obtaining the Red Seal Endorsement certification in order to earn a higher wage.
T – Time based
Financial goals should have a time-bound component in order to stay on track and manage success.
Example: S.M.A.R.T. Goals
Jacob is a mobile crane operator with a Red Seal Endorsement. Jacob usually works at various construction sites on a full-time basis. The project he is currently working on is estimated to be completed in 8-12 months. Jacob may have a gap in work available once the construction is completed, so Jacob would like to save some funds. Jacob does not have any current debt load.
S.M.A.R.T. Goal – Jacob is to contribute $1,500 on the 1st of each month to a high-interest savings account for the next 8 months to build an emergency fund that will be sufficient for 2-3 months living expenses.
- Specific – The goal is specific enough outlining that Jacob is to make contributions of a specified amount each month.
- Measurable – If Jacob were to not make a sufficient contribution of $1,500 or be late with the contribution then Jacob will not complete the task.
- Achievable – Jacob has a Red Seal Endorsement and works full-time hours. Beginning to build an emergency fund should be attainable for Jacob.
- Relevant – Having an emergency fund is important for Jacob’s construction trades industry as there may be gaps of employment between projects. This goal aligns with the bigger picture that Jacob wants to ensure all future living expenditures can be paid for without additional borrowing.
- Time-Based – Jacob has set this goal to be completed over the next 8 months. If Jacob were to contribute increased funds earlier, this goal will be accomplished.
A SMART Goals Worksheet template has been attached to refer to when establishing financial goals.
Creating S.M.A.R.T. financial goals is important on the road to financial independence. It is even smarter to periodically review those goals, re-evaluate that they remain valid, and potentially generate higher aims to reach once you begin finding your stride and comfort level in the journey.
an acronym for setting intentions to ensure that the aims meet all the criteria of being Specific, Measurable, Achievable, Relevant, and Time-Based
