Episode: 306 - Kickstart Your Goal-Setting for a Debt-Free Life
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When it comes to achieving financial stability, setting SMART goals is an essential step. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound—a framework designed to turn big dreams into actionable and realistic plans. Here's a breakdown of how you can apply each element to reach your financial aspirations and eliminate financial stress.
Define Goals with Specificity
A clear and specific goal provides direction and purpose. Broad objectives like "saving more money" or "retiring someday" can feel overwhelming and lack focus. Instead, narrow it down—identify exactly how much you want to save, or where and when you'd like to retire. Specificity removes guesswork, helping you stay on track and avoid distractions.
Measure Progress Along the Way
Measurable goals enable you to track your progress and celebrate milestones. For example, decide on a savings target, like building a $5,000 emergency fund, or paying off a specific amount of debt. Quantifying your goals allows you to see your efforts pay off, keeping you motivated and informed.
Keep Objectives Realistic and Achievable
While ambition is inspiring, goals should be challenging yet attainable. For instance, tackling all your debt at once might feel daunting. Break it down into smaller, manageable steps, like paying off one credit card balance before moving to the next. Achievable goals ensure steady progress and prevent burnout.
Focus on Relevant Goals That Truly Matter
Your financial goals should align with your personal values and priorities. Consider what’s most important to you—whether it’s securing your family’s future, traveling, or becoming debt-free. Goals that resonate with your life vision are more likely to keep you engaged and committed.
Set Deadlines to Stay on Course
A timeline adds structure and urgency to your goals, helping you avoid procrastination. Assign deadlines for each milestone, like saving $1,000 for an emergency fund in three months or reducing debt by a specific amount within a year. Deadlines provide a sense of accomplishment and maintain momentum.
Embrace Challenges and Stay Motivated
Financial transformation often requires stepping out of your comfort zone. Motivation can wane over time, so consistency is key. Dedicate a little time each day to reviewing your financial plans, tracking progress, or adjusting your strategies. Writing down your goals and reflecting on why they matter can reignite your determination.
Tools to Simplify Your Journey
There are plenty of resources to support you in reaching your financial goals. Use worksheets to map out your objectives, and consider signing up for financial tips and strategies to stay informed and inspired. These tools can provide the guidance you need to keep moving forward.
By adopting the SMART framework, you create a clear path to financial success. This approach not only reduces stress but also builds confidence as you progress toward your financial goals. With focus, determination, and consistent action, you can achieve a more secure and fulfilling financial future.
Resources Mentioned
The Totally Awesome Debt Freedom Planner https://www.debtfreedad.com/planner
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Transcript:
Brad:
So you've likely come across the term SMART goals, but do you know what makes them so effective? Now, smart stands for Specific, measurable, achievable, relevant and Time-bound, which is a powerful formula for turning big aspirations into realistic, actionable steps. So in today's episode, we're gonna be unpacking each part of the SMART framework, showing you how to use it to stay focused, stay motivated and make real progress towards living a life free of debt and payments.
Anouncemer:
You're listening to the Debt-Free Dad Podcast with Brad Nelson. Brad and his co-hosts experience the anxiety of living paycheck to paycheck before learning the fundamentals of financial success. They are now on a mission to empower regular people to pay off their debt for good and enjoy happier, less stressful lives. Keep listening for inspirational interviews, tips, tricks and practical advice to gain financial freedom.
Brad:
Hey guys, welcome to today's show. I am Brad Nelson, founder of Debt-Free Debt. I paid off about $45,000 of debt. I've been debt-free now for more than 11 years outside of my mortgage. I've also been fortunate to help thousands of other people save and pay off tens of millions of dollars with the work that we do here at Debt-Free Debt.
Amber :
And I'm Amber Taylor and my husband and I paid off $54,000 in 20 months and we have been living debt-free outside of our mortgage since 2018.
Kati:
And I'm Katie Hatfield and I am still on my freedom. Sorry, my name is Katie Hatfield and I am still on my journey to debt freedom and I have paid off in the last six years, on a single income, over $190,000 in debt.
Ryan:
My name is Ryan Nelson, and my wife and I paid off one hundred and sixty thousand dollars in debt over eight years while raising three kids.
Brad:
So, guys, after listening to this episode, if you are ready to take things to the next level, you're ready to break free from living paycheck to paycheck, reduce financial stress, you want to build a savings and you want to finally make progress in paying off debt for good, but let me guess you're probably really not sure where you should get started.
Brad:
So we've got some incredible resources that we're going to be sharing with you later on in today's show that's going to do this, that and help you get started.
Brad:
So, guys, today we are talking all about goals and I say it all the time when it comes to living paycheck to paycheck and helping people over the years, myself included, and obviously you guys can share a little bit of your background with this. But what I find all too often is with people who are living paycheck to paycheck is they have very loose, if really no goals whatsoever that they're working on with their finances. Their goal might be just to survive, right? That's kind of the mindset that a lot of people are in, and I don't want to laugh and say I'm joking about that, but I think the reality is why a lot of us struggle with a lot of emotional and impulsive and wasteful spending is because we just don't really have any clear direction as to where we're going with our finances. I think this is gonna be a great topic, especially being a new year. A lot of people, you know, have goals of wanting to improve their finances, wanting to get out of debt, so I think this can be a great topic today.
Ryan:
When I think loosey-goosey goals for me I mean, and for years in debt and for other things, whether it's eating, healthy or whatever. I love loosey-goosey goals because, guess what, I never really fail. Because it's just easy to say one day I want to do X and like one day I can just keep saying one day until maybe it'll happen and maybe it won't. But if it doesn't happen today or tomorrow or a year or three years or five years, hey, it's just one day. I didn't mean today or tomorrow.
Kati:
And I've always been one that's terrible about setting goals I'm not a vision board person or anything like that because I'm like because, as soon as I have a goal, then I freeze and I'm like, nope, can't do it, I think I'm just going to fail, so let's not even attempt to do it. It probably has been just the last three years of paying off debt that I've finally really gotten to a point where I'm like okay, this is why I am doing this, this is what I want to accomplish. So, yeah, it was definitely a process to figure out what my purpose for getting out of debt really truly meant.
Amber :
I think you make a good point. I think a lot of us just don't know where to start. Really, For me, I love goals. I'm like write them all down, figure it all out, break it all out. I think we're going to talk about all that today, but I'm excited about goals. Put it on a wall. Yeah, I think we're going to talk about all that today, but I'm excited about goals.
Brad:
Put it on a wall. Yeah, I think why a lot of people avoid it. I mean, obviously, some people avoid it because they don't they just don't really know the power behind it. But I think a lot of people avoid it because it's a little scary right. Anytime you want to achieve something decent in your life or you have a big goal that you want to go after, there's probably going to be some action items and things that you're going to have to do that aren't going to feel very good, you ain't going to like it, and I think sometimes that's why we avoid it, because of that fear, and it's just going to be a lot of hard work. But goal setting can be great. It gives you direction, it gives your finances direction. It really helps identify what's really important to you. All right, it's going to help you measure your progress towards your goal and tracking, and so all of these things are just going to really help keep you motivated. And we got another episode coming up not too long from now that's going to be all about how to stay motivated too. But I think goals and staying motivated they go hand in hand with each other. And setting these goals very much like what you just said, ryan, it's accountable right when you actually set these up. So I love this quote from Darren Hardy. He says unsuccessful people carry their goals around in their head like marbles rattling around in a can, and we say a goal that is not in writing is merely a fantasy, which is so true. So, guys, let's break these down.
Brad:
The first one I want to talk about is making your goals specific, which means that you need to have them well-defined and very clear. Like Ryan said, loosey-goosey. Common mistake people make is that they set goals that are just really broad, like, for instance, you want to retire, or you want to build an emergency fund, or you want to go on a vacation, and on surface level, those all sound good, but specifically, what do those things mean? Like, do you want to go on a vacation an hour from your house, or do you want to have to get on an airplane and fly halfway across the world? Right, that's. There's two completely different things, right, and same thing with retirement. Do you have this dream and vision of, if you're from the Midwest, like a lot of us are, and you have this dream and vision of owning a place that's in the warmer states so you can fly back and forth and live in the warmer state during the wintertime, like those things need to be specific. Or do you want to drive around in a camper in your older years seeing the world? So I think you need to spend some time figuring out, like, what specifically do you really want?
Brad:
And if you're living paycheck to paycheck, you know I like to always say focus on your feelings. Like how do you feel right now? How do you feel Like fear, embarrassment, shame, stress all the time. I don't want to feel like this anymore. And then what do you want to feel like? What are the feelings that you really want to have? And then what are going to be some of the steps in your life that need to get you to that place? Like, is it building an emergency fund? Is it paying off your credit cards? Is it having a certain amount of money in the bank? And now you can get more specific and get diving deeper into what actual goals that we need to have.
Amber :
So I can start feeling like this I think that really defining our goals is what really helped us stay focused and keeps us motivated and going, and more and more I'm really focused on retirement and that planning, and what is that going to look like? Before now, I had no idea what I even needed to do for retirement until I really started thinking about oh, what does it look like for us, though, and we really need to start diving into what that looks like so we know what number we need so we could get there. So same goes for paying off our debt. We needed to know how much we needed to pay off in order to get to that number and have a plan to get to that payoff date and number.
Kati:
Yeah, I had my goal sheet from 2014, so 10 years ago and it just said pay off debt. I had never added up my debts, I didn't have a budget, I had no idea what that meant, but that was my goal for the year Just pay off debt. And now it's been my goal for sure the last six years, and I'm still working on it, but at least I know what the number is and I can see the finish line. It's coming. I just paid off one of my last credit cards, so the end is in sight. I just paid off one of my last credit cards, so the end is in sight. 10 years ago, I had no idea what that number even looked like.
Ryan:
It's interesting for us right now, not just related to money. Just my wife and I are going through this whole thing a little bit again. My oldest son moved out earlier this year. My daughter's moving out in a couple of weeks.
Ryan:
It was easy to have these like smart goals. You know you're raising kids, you have goals, all these things. Now they're starting to leave and you're looking at each other. What do we do? What do we want to do now? And so we're walking through this and starting to have some of these discussions, because it is easy to like just be nonspecific about what you want. There's been some frustration this year because we don't know what that is, but we know we need to explore that more and figure that out. We laugh because we've been doing puzzles lately, which is so nerdy and old. But it was just something to do, because you just spend all your time doing all these things and run around and do all this sort of stuff. Then all of a sudden you're like they're all gone and they don't really need you. Suddenly you're like what are our smart goals? What are we trying to achieve now, these next 20 years until we retire? So it's just an interesting as we're bringing this up. We're kind of walking through this right now.
Brad:
So, now that we covered specific, the next one is making your goals measurable. So they should include, like, exact amounts of things. You just said, katie, you had your goal of just paying off debt 10 years ago, right, and so that isn't something that you can just measure, right, it's got to be specific, measurable, like what is the amount? Like, for instance, I had mentioned building an emergency fund. Maybe you're someone who's constantly stressed, so think to yourself what would be a number in your savings account that would ease a lot of that stress and tension in your life. Is that $1,000?, is it $2,000?, is it $3,000? Is it $5,000? You know, you got to decide what that is. It could also be a certain amount in your checking account. Maybe you're someone who struggles with overdraft fees and things and constantly feels like you just never get caught back up. Maybe it's having a certain amount in your checking account as a buffer, right, but make sure you come up with an absolute number so you can actually measure the progress versus, obviously, the actions and things that you're taking. So the third one is going to be achievable. So I think this is probably one of the.
Brad:
This is hard, you know, obviously, when we work with people, a lot of people that first start working with us. They're very motivated and their big goal is I just want to be debt free, I want to pay off all my debt. I want to do it, but that's a long journey. Right, it really is, and it's okay to have that vision of where you want to go, like longterm. But you also want to make sure that your goals are achievable and that they're somewhat realistic.
Brad:
Now I think they should be like mostly realistic, but also to the point where they're going to push you a little bit, they are going to make you a little uncomfortable, they're going to cause you to take some bigger actions in your life to get those results, and I think the reason why you want to have that little bit of that pressure on you is so you actually do the stuff that needs to get done, and they're too easy. Right, we tend to be a little bit more lazy. Needs to get done and they're too easy. Right, we tend to be a little bit more lazy. But if we put some urgency on it and we put some pressure on ourselves, we tend to push harder towards achieving the things that we want to. The crazy idea of goals Like, for instance, it'd be stupid for me at 45 years old to say I'm going to become an NFL football player. That's never going to happen, right? So make sure there's something that again, it can stretch you a little bit, but you can also achieve it in the timeline that you're setting up.
Kati:
Yes, definitely needs to be realistic. But yeah, nothing big happens in your comfort zone, you do have to step out a little bit. Going on this debt freedom journey is one of the hardest, scariest things I've done, but it's been so so so absolutely worth it.
Brad:
So the next one we're going to focus on is relevant, and Ryan kind of just talked about this and his new hobby of puzzles.
Brad:
Laugh at my puzzles this is probably the hardest part about all of it, and it's like you just mentioned the frustrations that you guys are going through in this stage of your life is spending some time with yourself and figuring out what is meaningful to you. What is it that you want to have in your life? And that's not easy, that's hard and it's again one of those things that's easy to ignore, but it is so necessary for you to figure out, like, what kind of life do you want to live and what matters to you, and not what society is saying, not what your family is saying, not what your friends or coworkers are saying, but what matters to you, because I mean, the reality is is your finances are going to help take you there. So you know you got to really figure out where are we going and then what do we need in place in order to get there? And for me it's a challenge.
Brad:
Right when I first started this and I remember I used to get I used to wake up so early in the morning to work on some of this stuff and figure out what I wanted to do. And crazy enough, guys, I still have the original like journal and book that I started before I even opened this business and, amazingly, the stuff that I wrote down in there the majority of that what I wanted a career is now this business. This stuff works. It's just it's hard, it's messy. You got to spend some time with yourself and that's not always fun. It's a little uncomfortable.
Brad:
It's a little. It's very uncomfortable at times, right, and you're writing down like these things that you want. If you would have told me 10, 11 years ago that I would have been controlling my own schedule, running my own business, working from home, I would have been like you're nuts. But that's what I had written down. And when I wrote it down I was like it doesn't feel like that's even a possibility for me. But the reality is is once you write it down and you're willing to start taking the actions to get there, things begin to work in your favor. It's pretty cool.
Ryan:
This is one for me where we talk about motivation. This is like motivation it doesn't last. It's like just that initial feeling of we're going to pay off debt, let's go. You may have that for a little while, but then there is going to be a point where it's just not going to keep you going. There is going to be a point where it's just not going to keep you going. So, when you think about your why maybe it's you want to change careers and that's one of the big reasons you want to get out of debt You're going to be in the moments of wanting to spend money, which you will be. It's going to be easier for you to look at your big why and basically ask yourself I am trading this thing I want right now for my career and if you really really want to change your career.
Ryan:
When we figured out our why, it was easy.
Ryan:
I'm not saying we never said yes to things, but it was a lot easier for us to say no to a heck of a lot more stuff than we used to, because what we were saying is that stuff is not important and if you're finding that you are consistently choosing to buy stuff over that why, then it's not the right why.
Ryan:
When I started, my why was to get out of debt so I could buy more cool stuff. That really wasn't the reason, but it was when we started and it's why we just didn't really stick to our budget. But once we figured out what we really wanted to accomplish, it was easier for us to say no, because I guarantee you, within three or four months and we see this all the time people get motivated, they get going and within three to four months, life happens and it punches you in the mouth and you're like going to be faced with decisions and it's easy just to say I don't want to do it. I really think this is the one of the biggest things you could do is spend time on this and really really figure this out between you and you and your partner, whoever it might be, and get on the same page with this. To me and I know this isn't the same for everybody, but for me this was the driving factor in us staying consistent.
Kati:
Yes, one of my favorite quotes is actually from Zig Ziglar and it says people often say motivation doesn't last. Well, neither does bathing, and that's why we recommend it daily. So, yeah, it's like you have to kind of motivate yourself and that's why I like the roots 15, where you spend like 15 minutes a day, just little bits, every morning looking at your finances, yeah, I would agree.
Brad:
I think this is where most people tend to fail and I think we all have when we first started is that we didn't have that close connection to why we were doing the work. And I think this is where a lot of other people fail is that they have this good intention of wanting to get out of debt, but they just don't have any outside of the easy answers of, yeah, life would be better, but they just don't have anything driving them and so, seriously, spend some good amount of time on this one. And then the last one is time bound. So goals should have a defined timeframe or deadline, and the reason being is to create a sense of urgency, and it really helps prevent you from putting things off and procrastinating with it. This is why, like in Roots, one of the big savings goals that we have for our members in their first 30 to 60 days is getting their emergency fund done, which is a thousand or $3,000. And for a lot of people who are living paycheck to paycheck, I mean right now 63% of people can't afford a $500 emergency expense without going into debt, and so when people see that, they're like, oh my gosh, I'm never going to be able to get that done.
Brad:
So the deadline isn't to make you feel like a failure. It's to get you to start doing something to get it done. Because if you're just kind of like I'll get it done someday or we're going to get it done by the end of the year, you're less likely to take action. If you don't put any urgency on getting the goal done, It'll just sit there and sit there and sit there and it'll be that well, someday we'll work on that right. But if you put urgency on it, it triggers you to want to take action. But if you put urgency on it.
Kati:
it triggers you to want to take action. That was definitely my first goal that I thought was going to be impossible was getting that emergency fund funded. And it's like, no, I should just be paying off debt. But every time I would pay off debt, life happened and then something needed to be charged, like a car repair or whatever. And then I'm like, okay, well, I guess I'm just going to swipe my credit card again and do that. And that's just how you keep digging yourself into the same hole over and over and over. And when I finally started to get a savings account, and then use it and then rebuild it and then use it again, because emergencies always came up.
Kati:
It was just like okay. Now I understand why this was so important. To begin with, because I got out of the old cycle, the old habits, and now I can actually gain momentum when life happens.
Brad:
All right, guys. So if you went through this and you're like, oh my gosh, I got to set some of these goals, but where do I even get started with all this? You're like, oh my gosh, I got to set some of these goals, but where do I even get started with all this? We actually have done so much of the work for you. We've created an awesome goal setting worksheet that we are going to give you absolutely free, just for listening to this episode and you can find a link to the PDF of this worksheet right in the show notes of this episode and it's going to give you, guys, everything how you can start working on some of this, all the reminders that we talked about here today, what are the most important things to focus on and we're also going to give you some goal cards at the end of that worksheet, where you actually write each of them down, put it on your mirror so you know exactly what you guys are working for.
Brad:
If you're ready to break free from living paycheck to paycheck, you want to reduce financial stress. You from living paycheck to paycheck, you want to reduce financial stress. You want to build savings and finally pay off debt for good, but you're really not sure where to start. Don't worry, we've got you covered. Simplify my Money is sent each Sunday to your email and it's going to be your step-by-step roadmap to better financial control, and you're also going to learn easy-to-follow strategies to manage your money effectively. We're going to give you stress-free money tips to help you make better decisions with your finances. You're gonna be able to gain the tools and the confidence to tackle your financial goals head on. Sign up for Simplify my Money by clicking the link at the top of the show notes.
Amber :
Let's talk about that baby. Let's talk about your money. Let's talk about all the good things, All the bad things that may be. Let's talk about that. Let's talk about that. Tune into Dead Free Dad. Tune into Dead Free Dad. That's how I mean this time for the celebrations of the show. First we have Max. I brought my lunch every day this week and avoided eating out.
Brad:
Such a great win, easy way to save some money, hard to do, but a great win, carla. Checked my most recent check stub and I found out I got a $2 an hour raise, which is awesome. Carla, congratulations to you. Good, good chunk of money hour raise, which is awesome.
Kati:
Carla, congratulations to you. Good, good chunk of money. So Esther's celebration this week was finishing a 30-day declutter challenge and got rid of more than 500 items. That is amazing.
Brad:
That is a huge amount of stuff.
Ryan:
And Sade. I started selling excess stuff we have in our garage and I made $180 off of two items.
Brad:
Awesome Way to go, guys. Congratulations and, as always, congratulations to all of you guys who are taking a stand for your financial life and are wanting better. Hey, we get that getting out of debt isn't easy, but with our help and with your consistency and discipline, we promise you guys, this will be some of the best work that you guys do in your entire life. Thanks for joining us on today's show and we will see you guys on the next episode.
Anouncemer:
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