Do You Have SMART Goals for Your Debt?

Do You Have SMART Goals for Your Debt?

By Michael Peterson
In June 22, 2020

We talk a lot about credit card debt because it’s so pervasive in our society. In fact, the Federal Reserve estimates that the average American household carries $5,700 in credit card debt. And their prognosis is worse for those who can’t pay off their balances in full each month – those borrowers shoulder an average outstanding credit card debt of $9,333.

If you fall into this second category, it’s time to buckle down and get SMART. No, we’re not talking about the fun gadgets of a 1960s TV show. Rather, this is a framework that helps you thoroughly evaluate your goals and create a plan to actually accomplish them.

SMART was originally developed for corporate applications to assist businesses in setting their performance objectives. But the framework functions quite well in personal financial situations as well, where achieving a goal requires concrete and quantifiable actions.

SMART goals must be specific, measurable, attainable, realistic, and timely.


Define the ultimate outcome of exactly what you want to achieve in clear and unambiguous terms. The more specific you are, the better your chances for reaching your goal. Perhaps the most important consideration in setting down your specific measurement criteria is the reason for your action: Keeping your “why” in sight helps motivate you to stick with your plan.

Rather than, “I want to be free of credit card debt,” a stronger goal might be “I will pay down my credit card from XYZ Bank by the end of the year by increasing my monthly payment by $400 so that I can begin to save money for a home down payment.” If you have balances on multiple cards, it often makes sense to establish different goals for each card.


Break your goal down into measurable sound bites that you can track. This helps you visualize your progress toward the end goal and is proof that your plan is working. Choose concrete elements that you can quantify and evaluate, such as the specific amount you will pay down each month or the number of extra payments you will contribute each billing cycle.

You can old-school it with a pencil and notepad, or you can create a fancy spreadsheet that does the calculations for you. These days, you can even find an app to track your goals with your phone.


Your goal must be something you can actually achieve. There’s no sense in creating the lofty goal of, “I will be debt-free in three months,” unless you’ve just won the lottery. Sure, your goal should be a challenge that might occasionally test your limits. But setting your sights too high may simply discourage you. 

Be honest with yourself. Consider whether you have the resources and capabilities to achieve the goal – if not, try scaling it back a little. Remember, paying off credit card debt can take time, so you’ll need a plan that is sustainable over the long term.


You don’t need to “dream big or go home.” When setting your repayment goals, remember there is a middle ground. With your sights set on your amazing end goal, keep your steps within your reach and relevant to your purpose. You need to continually feel that your goal, and the path to get there, is worth pursuing – otherwise, you’re likely to give up.

To establish realistic steps, consider your ultimate goal. Set manageable objectives that will really help you achieve your goal one step at a time. If your goal is to have a zero balance on all four of your balance-carrying credit cards, a realistic objective might be to focus on paying off one of the cards at a time – rather than attempting (and failing) to tackle the debt on all of them simultaneously.


Set a very specific timeline. Give yourself a starting date and a deadline to achieve your goal. View your deadline as a positive: This is the date when you’ll finally be debt-free (or pay off that higher-interest card or owe less than $1,000 – whatever your ultimate goal is)! Be sure that your timeline is something you feel confident in, based on your budget.

Then do everything you can to stick to your deadline. Of course, life happens, and you may need to adjust your timeline. But the more routine your steps, the more likely you are to reach your ultimate goal.

And remember: If you miss your deadline, don’t give up! You’ve come so far, and you can achieve your goal. Try some tweaking of your SMART framework, and then start again.
Credit card debt can feel like a heavy weight. But starting today, starting small, you can do it. And we are here to help you along your path to debt relief. The friendly folks at are ready when you need more advice on setting and keeping your SMART goals.

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.

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