By Mark A. Vergenes

As you move through life, it’s essential to continually establish, measure, and refine long-term financial goals. We recommend using the S.M.A.R.T. planning tool. It’s believed George T. Doran created this acronym for a management paper he wrote back in 1981 for the Washington Water Power Company.

S: Specific Financial Goals

When you create goals, it’s not enough to write down that you want to have enough money to live a general kind of life or save for retirement. Instead, be specific in ways that help you map out a real plan: pay off my existing debt in the next 12 months, or save enough in the next eight years to pay for half of my two children’s college.

You can have more than one specific goal but you shouldn’t have dozens. Pick the items that are most important to you and your way of life and focus on achieving the most important goals.

M: Measurable Financial Goals

As you develop your financial goals, you’ll need to assign dollar values. To see your progress as you reach your goals, you’ll need to measure them periodically.

A broad goal is to save for retirement. Think more specifically. You may be 20 years from retirement and want enough to spend $50,000 a year each year for an estimated 15 years of retirement. This allows a financial planner to help you figure out reasonable savings goals, factoring in interest over time, expected returns, social security, cost of living, health care concerns, and inflation.

A: Assignable Financial Activities

Who is going to track your financial goals? Are you going to spend time doing this with your partner or spouse? Would you like a financial planner to help you track your progress? Is your sister-in-law an accountant who wants to help? To reach aggressive financial goals, assemble a team of experts and make sure everyone understands their assigned role.

R: Realistic Financial Goals

We all want a Porsche. And a villa in Italy. And to retire at age 40. But shooting for the moon is not helpful when creating financial plans. Consider your income and a reasonable projection of your future income, and plan accordingly. If you want to eliminate mortgage payments before you retire in five years but you owe more than $100,000, diverting all your money into home payments may not be your best move. It may be more realistic to downsize, refinance, or even rent your home to tourists for three months of every year.

T: Timeline

Most of us postpone serious financial commitments until our 30s, 40s, 50s, or beyond. Create realistic timelines for your goals and stick to them. While it may feel uncomfortable to extend your mortgage into your retirement years, it may be necessary to meet other financial obligations in the interim.

The more time you give yourself to reach financial goals, the more attainable they will become. Planning early can, literally, pay off in the long run.

Mark A. Vergenes is president of MIRUS Financial Partners. He will speak on this topic at IPMI’s 2019 Leadership Summit, Oct. 3-4 in Pittsburgh, Pa.

Investment Advisor Representative offering Securities and Advisory Services through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity. MIRUS Financial Partners and Cetera Advisor Networks LLC are not affiliated.