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Setting SMART Financial Goals for 2023 with Sanlam Credit Solutions

17 January 2023

It’s no surprise that the subject of money is one of the most talked-about topics in the world, especially for the upcoming year. Whether you’re discussing personal finances, budgets, investments or other financial topics, it’s clear that money plays a major role in our lives.

Yet, many of us don’t have a clear plan set out for achieving our financial goals. As an example, you may set a goal to save a certain amount of money this year, but without a plan to get there, it is very likely you will fall short. That’s why it’s important to focus on goal setting with a plan. By setting financial goals and creating a plan to reach them, you can achieve financial freedom and security, but most importantly you can live with confidence.

Ayanda Ndimande, Business Development Manager from Sanlam, says, “Developing good habits for managing personal finances is an important step to take to ensure a secure financial future. Good habits such as budgeting, saving, and investing can help you to achieve your financial goals. Developing these habits early on can make managing your finances easier and more effective and will ensure that you are able to make the most of your money.”

Using SMART goals for financial success

SMART goals are a great way to set and achieve your financial objectives. They are specific, measurable, attainable, relevant, and time-bound. Using SMART goals helps you reach your desired outcome. They give you clear structure and guidelines so you can focus on important tasks that, in the end, maximise your results.

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Using this approach helps you to determine exactly what you want to achieve and forces you to think about how you are going to track and measure your progress. It’s pointless to set goals that are unattainable as this will demotivate you, so being realistic about what is possible is part of the process.

On that note, it’s as important to make sure they are relevant to you and your future. It’s no good chasing a goal for someone else’s benefit. So, ask yourself, what’s in it for me? Why do I want to achieve this goal? Then finally, put a date to it. Otherwise, it will stretch on forever and you will lose interest or find ways to avoid or put off what has to be done to achieve your goal.

Nicolette Mashile aka the Financial Bunny, weighs in saying, “Towards the end of last year, I felt stuck. I realised that I had big, ambitious dreams but didn’t have actionable items to reach them. I have a whole financial bucket list but no real, tangible way to get there. In 2023, I am hoping to go back to the basics that we so often forget but we know work.”

How to plan for SMART financial goals

1. Set clear goals: Identify two or three financial goals that you want to achieve this year, then write them out as objectives using the SMART approach. Here is an example:

“I want to save R1,000 per month on my eating out and entertainment expenses, and use that money towards paying down my debt. So by the end of December, I want to have paid off a total amount of R12,000.”

Let’s see if this objective qualifies as SMART:

  • Specific – Yes, it is very clear, sets out a monthly target and a way for achieving it (there is a definite plan of action)
  • Measurable – For sure, it can be measured monthly and at the end
  • Achievable – It seems doable, especially if you consider the costs of eating out
  • Realistic – Yes, it’s spread out with milestones per month
  • Timely – Yes, it’s spread out with milestones per month

2. Create a timeline: Break your goals down into smaller, more achievable steps. Develop a plan of action that includes specific tasks and deadlines. Using the same example above, you can see how easy this step is once you have created a SMART goal, since the timeline is already embedded in your objective and clearly outlines a timeline with milestones and a deadline to keep you on track.

3. Analyse current resources: Evaluate the resources you have available that will help you to achieve your goal. You may, for example, select to use the insights section of your Sanlam Credit Dashboard to monitor your progress and track the impact that paying down your debt has on your credit score.

4. Identify challenges and eliminate distractions: Taking the time to identify and plan for any challenges upfront allows you to better deal with them when they happen. For example, what will you do when you are at the end of the month and your friends want to go out for dinner? Do you decline or will you be tempted to tuck into your savings? Communicating your goal upfront to your friends will make it easier for you in the long term. They will respect your decision and will admire your ability to stick to your plan. You may even influence their behaviour positively. Make sure that you are eliminating any distractions that may prevent you from reaching your goals. This must include limiting the time you spend on activities that don’t contribute to your goals.

5. Create a budget: Develop a budget for the resources you’ll need to reach your goals. If you are not going to be eating out, what’s your plan for dinner? Maybe eat to a menu and shop proactively for groceries so you are not tempted to get take-out on those days that you just don’t feel like cooking or are too tired after work to go shopping.

6. Monitor progress: Track your progress towards your goals throughout the year. This will help you stay motivated and accountable. Check your credit score monthly to monitor your progress regularly. From your Sanlam Credit Dashboard, it’s easy to link your bank accounts and monitor your spending against a budget that you have created.

7. Evaluate, adjust and ask for help: Even a great plan sometimes gets derailed. As long as you are assessing and measuring your progress against your milestones, you will be able to adjust your plan and make the necessary changes as you go along. Don’t be afraid to ask for help when you need it. Whether this is from a family member, friend, or a Sanlam Credit Management Coach, having someone to help you stay on track can be invaluable.

Mashile adds, “With Sanlam Credit Solutions, you can use your credit dashboard as a financial roadmap to achieve your goals. With the complementary helpful tools and access to experienced Credit Management coaches, you can take control of your credit profile, and focus on responsible credit utilisation and debt management while transforming goals into habit-forming and achievable plans.”

When should you set financial goals?

The best time to set financial goals for yourself is always NOW. The time of year or the stage of your life doesn’t matter. What matters is that you act.

So, reflect back on last year. Is there anything you could have done differently? How would your situation look today if you had? If you didn’t set goals or didn’t achieve your financial milestones, it is important to take a step back and evaluate the reasons why you were not able to reach them. This evaluation should include factors such as how much you were able to save, how realistic your goals were, and any other contributing factors. Now, you can take action to try to make up for the lost time. With your new knowledge of setting SMART goals, you will soon be on your way to gaining control and celebrating success.

Use your Sanlam Credit Dashboard as a vision board for managing your finances

Visualising financial goals requires that you create a mental or physical representation of the goals you have set for yourself financially. This could be anything from writing out your goals on paper, creating a vision board, or even just imagining the financial future you want to achieve. The idea is to create a visual representation of your financial goals to help you stay focused and motivated in achieving them.

The Sanlam Credit Dashboard makes it easier to visualise your financial goals. With its interactive graphs and charts that display your financial data, such as your credit score, financial health score and wealth score, you are able to set realistic goals for yourself and measure your progress on a monthly basis as your data gets updated. Your dashboard makes it easy for you to compare your current performance with past performance, and to identify areas that need improvement. It’s a live, visual representation of how close you are to reach your financial goals and provides useful insights into how to better manage your finances and investments, so that you can make better financial decisions in the future.

When it comes to your finances, knowledge is power

Knowing your credit profile, credit score, and credit history can help you make informed decisions and establish creditworthiness. Taking the time to review and understand your credit situation is essential for financial success. Be SMART and use Sanlam Credit Solutions as your system for 2023. Register your profile and start achieving your SMART financial goals today.

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