While I have been working hard to stick to my budget and pay down debt (though, as I confessed, I have STILL been using the credit cards), part of my problem that I had weak goals. That didn't help my progress and it's not a good idea as you grow in your financial knowledge and want to work toward bigger dreams.
I did have a had a goal: Get out of credit card debt by Sept. 2007.
But that's a weak goal.
Why? It isn't S.M.A.C.
S.M.A.C. means Specific, Measurable, Achievable and Compatible. A good goal is SMAC.
I learned this is the first seminar I ever attended
about personal finance (actually, I was writing about a man who traveled
the city doing these seminars and I watched his presentation to
teachers at a local elementary school). It comes from the David Bach Finish Rich stuff.
But I didn't pay much attention. I don't have a good excuse. I just felt like "Yeah, yeah. Goals. I got it, I got it."
My mother always told me I was too smart for my own good.
So let's overhaul my debt repayment goal.
Specific: What are the details? What will it cost? How much time will it take?
Weak goal -- Get out of credit card debt.
Strong goal -- Pay off $10,989 on Mastercard by Sept. 2007.
Measureable: How will you know if you're making progress? What checkpoints will you have?
Weak goal -- I'll pay more than the minimum.
Strong goal -- I will set up my online bill pay to put $700 a month on the credit card. If I earn extra money in a month, I will send a separate check for that amount.
Achievable: What action will you take within 24 - 48 hours? Who will you share this with? What challenges might there be and how will you overcome them?
Weak goal -- I'll start right away.
Strong goal -- I will set up the automatic bill payment in the morning before work. I'll tell my guy what my plans are. I must be careful not to go over budget and shortchange what I put on the card.
Compatible: What values does it help you accomplish? Will achieving this goal conflict with any your values?
Weak goal -- It'll be better to be out of debt.
Strong goal -- Eliminating my credit card debt will give me peace of mind about my financial security. It will help me lay a strong foundation for the future of my future family!
That, my friends, is how I should have been laying out my goals. Even the things I mentioned in my Personal Challenge posts were good goals, but poorly planned.
So here's a new goal for the week:
I will reevaluate my budget to determine exactly how much money I would need to put on my credit card to pay off $10,989 by September 2007.
If I do not have enough in my budget to pay off the total by September, I will determine how much more money I would need to do it.
If this debt repayment by September 2007 is unrealistic, I will create a new repayment goal compatible with my current budget.
How's that? And, remember, these things are never etched in stone. Life happens quickly and it doesn't wait for you to figure out what you're doing. Just keep checking to make sure things are working.