Setting A Smart Financial Goal This Year


Setting a SMART Financial Goal this Year


How to set a savings goal for a larger purchase

Dear Kim,

I recently paid off my debt  by completing the Debt Management Program and I am officially debt free! As I was rejoicing in my new found freedom, I realized that my car will need replacing shortly. It is over ten years old and has 150,000 miles on it. I want to be smart and not put myself right back into debt. I am hoping to save $10,000 over the next year to put towards the car. What is the best way for me to begin saving for a car?

Thank you,

John, Illinois


Dear John,

I am so happy to hear that you are debt free! What a wonderful way to start off the New Year. The average new car price in 2014 was $32,000. My suggestion would be to start with a SMART goal. This is a goal that is specific, measurable, attainable, realistic and timely. Your current goal is to save $10,000 in one year for the purchase of a car. I would simplify that even more and create a specific goal stating, “I will save $416.60 each pay period.” I also recommend you find the make and model of the car that you are interested in, so that you have a visual motivator.

The measurable aspect of  your goal is simple. You should be putting that money in a savings account each pay period, so you will be able to measure your progress by the balance in the account.

Is this goal attainable? Have you figured out how you will come up with the additional $416.60 per pay check? Perhaps you can take the money you were paying toward the Debt Management Plan and apply it to your goal.

Is this goal realistic? Are you hoping to purchase a small sedan or a large SUV? Should you buy new or save money purchasing pre-owned? Will  $10,000 cover the entire cost of the car or is that only the down payment? Make sure that the goal and the steps necessary to reach the goal are realistic. I would love a new luxury sports car; unfortunately it is not only unrealistic financially, I also have two small children and two dogs that would not fit in a two-seat sports car.

Lastly, make sure the goal's time limit is appropriate. Is one year enough time for you to save $10,000? Establishing a realistic time frame is an important step toward reaching your goal.

Following this outline will help you achieve your financial goal. Keep pictures of the car around your home and in your wallet so that you never forget what you are working towards. I am so pleased to see that you are making wise financial decisions to maintain your debt free status. I realize that it would be easy to go to a car dealership tomorrow and take a loan for a new car, but imagine how satisfying it will be at the end of the year to use the $10,000 to walk away with the car that you worked and saved for. I wish you the very best of luck, and a financially healthy and happy New Year!

Thank you


Kim headshot 3

Kim Cole is the Education Outreach Coordinator for Navicore Solutions. Kim provides financial education workshops and seminars to communities. Readers can submit general questions relating to personal finance, credit scoring, debt management, student loans, home finance or bankruptcy which may be highlighted in the next month's edition. All identifying information will be kept anonymous.

Please send your questions via email to




Go Back