Setting SMART Personal Finance Goals | The Modest Millions Show

That which is measured improves. Easier said than done when you’re trying to figure out your personal finance goals for the next 30 years. So how do you keep you personal finance goals on track? It all starts with SMART goal setting. In this episode we’ll work through the foundations of setting big and small SMART personal finance goals so you can stay on track to reach your modest millions.


  • The importance of setting goals for your personal finances
  • What are SMART goals?
  • Why do your personal finance goals need to be SMART?
  • Setting macro and micro personal finance goals
  • How we use Google Drive to run our budget and track our goals
  • A breakdown of our family’s SMART personal finance goals


Setting SMART Personal Finance Goals

On this podcast, we talk a lot about looking to the future and charting our path to our modest millions. Heck, it’s in the introduction for each episode. We might want to retire in 10, 20, 30 years, or we might want to go on more vacations, or we might want to have a second home or buy some rental property.

Too often, and I’ve been guilty about this as well, we dream pretty big. We figure we’ll shoot high and in the hopes that we’ll get most of the way there (as Mrs. Modest would remind me from high school, “Shoot for the moon and if you miss, you’ll land among the stars.” Or, conversely, we don’t dream big enough and say things like, “Oh, I could never retire early. That’s an impossible goal.”

So, why do we find ourselves saying such things about our goals and setting ourselves up for failure to reach them? It’s because we don’t set SMART goals along the way.

The path to successfully reaching our personal finance goals is paved by SMART goals. SMART personal finance goals help you stay on track so you can hit more milestones throughout your journey to modest millions.

So, what are SMART goals? SMART is an acronym for specific, measurable, attainable, relevant and timely. It’s a concept that is popular in the workplace, and something that I do in my day-to-day work in marketing to help make sure we can accurately track our success. So, what I want to do today is apply these principles to personal finance to help us all achieve our personal finance goals.

Start by thinking about a goal you want to accomplish. Go ahead, I’ll wait for a minute to get something in mind.


Think of this as the general framework of your goal. It should aim to answer the five Ws: who, what, when, where and why.

  • Who needs to be involved in the achievement of this goal?
  • What, specifically, are you wanting to accomplish with this goal?
  • When are you wanting to accomplish this goal?
  • Is there a location that is involved in this goal?
  • What is the reason for this goal?


Pearson’s Law states “That which is measured, improves.” Personal finance goals are no different. How else are you going to figure out if you’re on track toward hitting your goals? This category includes any measurable criteria: time, dollars, percentages, quantities, etc.


This is where shooting for the moon is put in check. Setting unattainable personal finance goals is demoralizing. If you’re set up for failure from the get-go, it’s going to be harder and harder for you to find future personal finance success. Make sure your goals are attainable. One way to do that is to look at the penultimate goal at the macro level, and then work backward by setting smaller micro level goals. They should always logically ladder up to your primary goal. This provides a good set of checks and balances to make sure they’re attainable.


If you’re setting personal finance goals, you’re going to want to make sure that the goals you set align with the overall goal. This helps keep you focused on the dream at hand, rather than an offshoot that risks distracting and delaying you from achieving your personal finance goals.


You can set all the goals you want, but if you don’t put a date on achieving them—and holding yourself (or your spouse) accountable—you’ll find yourself continually sliding your goals to the future.

Once you start thinking through these five buckets, you’ll be able to combine everything together and craft a SMART goal. As you think about the goal you thought about earlier, how can you turn that goal into a SMART goal?

Let’s take a quick break and we’ll come back to work through a real-life SMART goal setting example.


Tracking your budget and monitoring your personal finance goals requires diligence and organization. It’s why we rely on Google Drive to track our numbers. We use Google Sheets for our primary budget and forecasting returns, debt payoff plans and retirement budget scenarios. Sure, you can track these in Excel worksheets or other methods, but I like having a mobile option to pull up the information at any time, from anywhere. If you have a Gmail account, you already have a Google Drive account, and you may already use it in one way or another. If you’re looking for a lightweight way to track and monitor your personal finance goals, give Google Drive a shot.

How we’ve set our personal finance SMART goals

Alright, and we’re back.

Since this a podcast about going down this journey together, let’s start with some of the SMART personal finance goals we’ve set up in our household. Your mileage might vary, but at least it helps us put something on paper to adjust against.

We start with a macro SMART personal finance goal: Generate a retirement savings and investment balance of $2MM by 2035 so both me and Mrs. Modest can walk away from our jobs to be financially free and do whatever we want with our time, while owning a second home and traveling throughout the year.

Let’s work through our checklist to see if it lines up:

  • Specific? You bet. We know who (me and Mrs. Modest), what (financial freedom), where (across the country and world), when (2035, when we’re 50 years old) and why (so we can be free to do whatever we want).
  • Measurable? Yep. We put a dollar figure on the goal. Either we have that amount across our accounts, or we don’t.
  • Attainable? We’ll come back to that one.
  • Relevant? This goal is dripping with personal finance. Check.
  • Timely? Yes, we put a date on the goal.

So, how do I know that goal is attainable? Well, I know so because in preparing for this episode I walked through all the numbers, but when you start, you’re not going to know off the bat if the goal is attainable. Why? Because your Big Hairy Audacious Goal is so far out there that it can feel like you’re playing darts, blindfolded. You need to set a preliminary macro SMART goal and work backward with some micro goals to make sure they all ladder up to the macro goal.

For personal finance goal setting, it starts with a budget. It’s because we’ve set up our budget that we know what expenses we plan on having when we’re retiring. For us, with our current level of expenses, we subtract our debts (mortgage, personal loan, auto loans and the costs of having kids in the house (diapers, clothes, daycare costs, school tuition, etc.). We then add back in some of the other “luxuries” we want to plan for like a second home, extra vacations, eating out, and then some of the extra costs of no longer being an employee like covering our own health insurance premiums.

We also figure we’ll earn somewhere around $20K in side hustle or part-time income to cover some of our discretionary expenses. From there, we calculate that we’ll need to withdraw around $80K per year from our retirement savings to cover the balance of our expenses.

Using the 4% withdrawal rate that we’ve previously discussed, we multiply that $80K by 25 to calculate a target nest egg of $2MM.

Just because we have a number doesn’t necessarily make it attainable. To figure that out, we also must refer back to our budget and figure out how much we’re socking away for retirement every year. These are where the micro goals come in to figure out if this makes sense.

Right now, between what we contribute to our workplace retirement accounts plus employer match, it’s about $600/month. We are currently working aggressively toward paying off some of our higher interest debt at an accelerated clip. By the end of this year, and this is a great example of a micro SMART goal, we’ll contribute $1,600 every month and any bonuses we receive from work toward paying off our line of credit and van loan by the end of 2017.

From there, we’ll deploy the snowball method—where we finish paying off one debt and then roll that same payment over into the new debt so as to not mess up our budget—toward paying off our remaining loans, while still contributing to our 401(k) enough to get the employer match.

Then, and here’s another micro SMART goal, we would have all of our debts—less our mortgage—paid off by the end of 2020 (just 3.5 years from now!). That, plus some of the other budget gainers like potential raises and/or bonuses at work, and the kids leaving daycare to go to school that we then redirect back into our retirement and investment savings, allows us to save 50% of our net income for retirement. Running the numbers, this gets us over the hump by the time we’re 50 using some pretty conservative return estimates.

So, yes, our macro SMART personal finance goal of reaching financial independence, or an early retirement, by the time we’re 50 is incredibly doable.

See, you’ve got to be confident and believe in your ability to achieve these personal finance goals. When you map out your macro and micro personal finance goals, you should feel confident and excited about being able to reach your goals. Don’t look back and only look forward so you can keep the forward momentum toward achieving your personal finance goals.

By setting short-term (or micro) personal finance goals, you can reach milestones faster and maintain the momentum to keep moving forward. When you look up (or back) to see how you’re doing, especially when you’re crushing your goal, it’s easy to lay off the gas, effectively hurting your ability to reach your macro personal finance goals in time.

As we start to wrap things up for today, I wanted to end with a quote from Antoine de Saint-Exupery, a French poet and author from the early 20th century. He tells us, “A goal without a plan is just a wish.”

Great years start with great months, great months start with great weeks, and great weeks start with great days. So, what are you going to do different TODAY that’s going to help you move one step closer toward your personal finance goals?


That’ll do it for this week’s episode.

What about you? Are your personal finance goals SMART? How are you doing with those? I’d love to hear from you.

Also, make sure to reach out with your feedback for me or for the show, topic ideas, personal anecdotes of your own journey or if you just want to say hi. You can always reach me at feedback[at]modestmillions[.]com.

For a recap of the strategies, tools and links that we talked about today, check out the show notes at

Also, while you’re on the site, don’t forget to subscribe to receive email updates when we post new episodes (you can do so at And please, if you like what we’re doing here and you find the information valuable, help us spread the word and show your support by leaving us a five-star review on your whatever podcast platform you’re listening to us on.

Join me next week when we talk about value versus price.

Until then, remember to keep squirreling away now to earn millions later!

Thanks for listening; we’ll catch you next time!

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