Literacy Month continues with Be a S.M.A.R.T. Financial Consumer
The more you know and understand your financial rights and responsibilities, the easier it is to avoid costly surprises and reach your financial goals.
By Shelley Koehli - Licensed Insolvency Trustee with D. Thode & Associates Inc. Vancouver
It’s week three and the focus is on being smart financial consumer. Last week we discussed Financial Goals.
S.M.A.R.T. Financial Goals
To me this means being knowledgeable about your purchases, about your budget and about your savings. Here I will discuss 5 ways to be a smart financial consumer.
S - Specific
Be specific about your wants, your needs and your goals. You need a concrete number, if you want to save money, start an emergency fund, or pay off a certain amount of debt. You also need a reason why you’re doing this – this part is critical but often overlooked. It could be as simple as saying you want to save $5,000 this year for an emergency fund for unexpected expenses such as home or vehicle repairs or in the case of lost income. This helps you stay away from borrowing to cover those extra expenses and also helps to build financial security.
M - Measurable
Have a time frame set so you can measure your successes. Measurable goals are easy to track because they’re specific to start with. When your goals are measurable, there are checkpoints along the way, making it easy to track your progress. Break your goal down based on your pay cheque cycle to make it even easier to stay on track.
A - Attainable
If you find your goals are not attainable, adjust the timelines to make them so. This part of your goal-planning details how you’ll achieve your goal. It could be by promising to pack your lunch four days a week, sticking to a smaller entertainment budget, or tucking away your credit cards for the year to steer away from unnecessary spending. Think of any potential roadblocks that could throw you off course and make contingency plans to address these
R - Realistic
Be realistic in your goals, do not exceed your means. Setting goals may seem daunting so start by creating small, realistic goals that are within your ability to achieve them. Challenge yourself to save a sum of money that your budget affords. Once you’ve achieved that goal, try setting a goal for a larger sum or for a longer period of time.
It’s great to dream big for your financial goals but make them more realistic by setting smaller checkpoints to strive toward and celebrate along the way.
T - Timely
Don’t stretch all goals out over a long period, ensure you have shorter goals so you have successes along the way. You now know what your specific goal is, how to measure your progress, how you’ll achieve it, and if it’s attainable and realistic.
Now you need to set a timely deadline for your goal. This part of S.M.A.R.T. goal setting ensures you measure your progress and gives you a timeframe to work within. Time management is key.
If ever you feel overwhelmed with goals to pay off debt or save up money, one of our Credit Counsellors would be happy to help you.
Shelley Koehli is a Licensed Insolvency Trustee and Chartered Insolvency and Restructuring Professional with D. Thode & Associates Inc. in British Columbia.
Please come back for our final week of Literacy Month where we will discuss Borrowing Money Wisely.