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Top 7 SMART Financial Goals from Benjamin Franklin

By Effluo | Published October 28, 2022 | No Comments

When setting goals, it is essential to incorporate financial goals within a list of your personal goals.   To do this, create a list of SMART financial goals you would like to pursue in order to achieve your definition of financial independence.   Since we will be looking at money goals, it only made sense to look to the teachings of a guy whose face adorns a hundred-dollar bill.  Yes, Benjamin Franklin.

Why study Benjamin Franklin?

Benjamin Franklin played a crucial role in building this nation.  He was one of the most important founding fathers and the only founding father who signed all four key documents establishing the United States.

• Declaration of Independence
• Treaty of Alliance with France
• Treaty of Paris – establishing peace with Great Britain
• US Constitution

He created and ran successful publishing businesses and made worthy investments.   His net worth, when calculated to today’s money, was estimated to be between $10.7 million to $85 million upon his death in 1790.   Given his significant life achievements and financial success, he seems like a worthy person to learn from.  

We studied his life and looked at The Autobiography and Poor Richard’s Almanac as sources for his wisdom.

SMART Goals Definition

The acronym SMART stands for the goal that should be set to make it achievable.  The purpose is to help you make your goals more useful.  It involves developing a doable plan to solve a specific issue or reach a particular goal.

• S- specific goals, or in this case, specific financial goals, identify the “What” behind the goal.
• M- Measurable goals; it is not done if it is not measured.
• A- Attainable goal with achievable steps; if you don’t believe you can attain it, you won’t attempt it.
• R- Relevant goal; ensures realistic financial goals apply to your situation.
• T- Time-based; provides a time frame for achieving the goal.  Gives a sense of urgency.

An easy way to apply this SMART framework is to use Effluo’s goal-setting worksheet.   Each Effluo Planner is designed around the SMART goal setting framework. If you want to give it a try, the free downloadable worksheet will ensure that your goals meet these criteria and give you a glimpse of the planner structure.

Top 7 SMART Financial Goals from Benjamin Franklin

1   Increase Your Income

2   Focus on Retirement and Savings

3   Find Work-Life Balance

4   Become Debt Free

5   Pay Close Attention To Your Accounts

6   Beware of All Expenses

7   Enjoy Your Wealth

1   Increase Your Income

This is probably the most common-sense goal when it comes to financial planning.   Benjamin Franklin knew that a great way to ensure your financial future would be to earn extra money.  He provided three ideas that would make increasing your income a realistic goal.

1. Discover your talents and skills
2. Follow a trade or a calling
3. Do not give up.  The first $100 is the hardest to make

Discover Your Talents and Skills

So I escaped being a poet, most probably a very bad one; but as prose writing has been of great use to me in the course of my life and was a principal means of my advancement – Benjamin  Franklin

Know what your strengths are and know your weaknesses.   To identify these, do not be afraid to try new skills.   You will soon learn what works and does not work for you.   Focus on what works for you and follow that path.

If you focus on your strengths, you will set yourself up for success.  

Follow a Trade or a Calling

He that hath a trade hath an estate; and he that hath a calling, hath an office of profit and honor, as Poor Richard says; but then the trade must be worked at, and the calling followed, or neither the estate nor the office will enable us to pay our taxes.  – Benjamin  Franklin

Once you develop a relatively clear picture of what your strength or calling is, execute it.   Franklin points out that with specific skills, you will be in demand and have profit and honor.   With a trade, you will have an estate.   It sets you up for financial success.  Following this advice will allow you to earn extra income and have the much needed discretionary spending.

Do Not Give Up.  Make Your First $100

I experienced, too, the truth of the observation that “after getting the first hundred pounds, it is more easy to get the second,” money itself being of a prolific nature.  – Benjamin  Franklin

Franklin points out that it is not easy to make money; however, once you make your first $100, know that you are on the right track to financial security.   It becomes easier with time, experience, and proven concepts. 

Whether you choose to grow in your career or add a side hustle, do not give up.  Keep working on making your dreams a reality.  They will pay off.

Ideas for SMART Financial Goals to Increase Your Income

• Discover your talents and skills
• Follow a trade or a calling
• Make that first $100
• Get a raise
• Work more hours or get a second job
• Start a business
• Invest in assets that pay you, such as real estate or dividend stocks
• Learn financial literacy

2   Focus on Retirement and Savings Plan

We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly; and from these taxes the commissioners cannot ease or deliver us by allowing an abatement.  However, let us hearken to good advice, and something may be done for us; God helps them that help themselves, as Poor Richard says.  – Benjamin  Franklin

This, now a very famous truism, is still worth paying attention to.   Franklin boldly said that God helps those that help themselves.   Therefore, please do not rely on anyone to support you financially in the future; it is in your hands.  Not the government nor any other entity will take care of you.  You are responsible for ensuring your own financial future to the best of your abilities.  Make retirement savings goals your priority. 

Make a goal to create a retirement plan and put your savings into it.   Talk to a financial advisor to get the right investment advice for you.   Whether it’s a high-yield savings account, a 401K, real estate investments, or any other savings/investment program, study them and apply them to your life.   Your retirement goal will be your personal key to financial independence in the future.

Ideas for SMART Financial Goals to Focus on Retirement and Savings

• Create an emergency fund covering 3-6 months
• Have a reliable retirement plan
• Talk to a financial advisor to learn different options available for retirement
• Read financial investing books

3   Find Work-Life Balance

Drive thy business, let not that drive thee;  – Benjamin  Franklin

As you work on growing your financial empire and creating a retirement nest egg, do not let that become your only purpose for existing.  As Franklin puts it,  drive your business, don’t let it drive you.  Your life is much bigger than just your financial and career goals.   Another good way to look at this is to take control of your finances, don’t let your finances control you.

It is essential to find that work-life balance, to focus on your family, relationships, health, and fun.

A good idea is to look at all of your life areas to evaluate and find a good life balance.   The Free Life Balance Wheel downloadable PDF can assist you with this exercise.

For more information about work-life balance and how to use the life balance wheel, reference the Life Balance and Life Balance Wheel blog. 

Ideas for SMART Financial Goals to Stay Productive and Healthy

• Complete the Life Balance Wheel exercise every three months
• Set boundaries for work-life balance
• Do not work on the weekends

4   Become Debt Free

But ah!  Think what you do when you run in debt; you give to another power over your liberty.  – Benjamin  Franklin

As a writer of the Declaration of Independence, Franklin valued freedom above all else.   He said that getting in debt you give another power over your liberty.   Therefore, it is not surprising that he advised us to be debt free as much as possible.  Take a look at your student loans, credit card debt, mortgage, car loans, etc., and create a plan to become financially independent.

Rather go to bed supperless than rise in debt.  – Benjamin  Franklin

It seems that Franklin did not see a reason to get into debt.   He preferred to go to bed without dinner rather than to rise in debt.    Therefore, as you work on steps to financial freedom, have specific goals related to becoming debt free.   Whether you use the ‘avalanche method’ to pay off the highest interest first or any other method, the key is to become debt free.

Once you reach that goal, develop good habits to ensure you do not get into debt again. 

Ideas for SMART Financial Goals to Become Debt Free

• Pay off one debt at a time
• Pay off student loan debt
• Pay off credit card debt
• Pay off a car loan
• Put additional money towards mortgage payments
• Get credit counseling
• Pay off your credit card balance entirely every month

5   Pay Close Attention To Your Accounts

Always render accounts and make remittances with excellent clearness and punctuality.  – Benjamin  Franklin

There is a saying in the corporate world, “if it is not measured, it is not done.”  This goes hand in hand with what Franklin discusses here.  Have specific accounts that you set up for yourself and regularly reconcile.  Specifically, set up a budget that you should work with for both personal and professional purposes.  

The best way is to create an annual budget at the beginning of the new year.  Divide that yearly budget into monthly allowances.  Then reconcile these budgets regularly.  Apply the budgeting rules that you set up to your everyday life.  

Not to oversee workmen is to leave them your purse open.  – Benjamin  Franklin

Likewise, similar to tracking your personal and professional budgets, overseeing people you have hired to do work is essential.   Whether an employed landscaper or a team working for your business, create a list of expected responsibilities and keep them accountable for performing the work. 

Ideas for SMART Financial Goals to Pay Close Attention To Your Accounts

• Create and review an annual budget
• Create and reconcile monthly budgets

6   Beware of All Expenses

Gain may be temporary and uncertain, but ever, while you live, the expense is constant and certain;  – Benjamin  Franklin

Franklin kindly reminds us that even if your income may be uncertain, your expenses are a certainty.  Therefore, make sure that you plan for them.   For example, if you celebrate Christmas and buy gifts for family and friends, that should not be a surprise expense at the end of the year.  Budget for it, and set money aside just for Christmas gifts.   Likewise, holidays and birthday get-togethers are not unexpected; therefore, expenditures for food and drink should not be a surprise.  You can definitely budget for that.

If you know how to spend less than you get, you have the philosopher’s stone.  – Benjamin  Franklin

Taking control of your financial life means taking control of your professional and personal finance accounts.   Always know exactly how much money is coming in versus going out.  This will give you a clear picture of your current financial situation.   Keep track of your monthly expenses by creating and reconciling a budget.   Keep track of your monthly payments for utilities, groceries, and other expenditures.  

The key to staying on top of your finances is to know exactly how much money is coming in versus going out.   If you can figure out how to live on less than what you make, you have the ‘philosopher’s stone.’   Philosopher’s stone in alchemy symbolized perfection, enlightenment, and heavenly bliss.  It was believed to be able to make any substance into precious metals like gold and silver.   In reality, Franklin was right.   You can collect gold for retirement if you learn to live within your means.

A Small Leak Will Sink A Great Ship

Beware of little expenses; A small leak will sink a great ship  – Benjamin  Franklin

Finally, as you pay attention to your expenses, do not ignore the small costs.  They add up over time into significant expenditures.  

For example, let us say that you pay $3.50 for your morning cup of coffee every day.  That is $24.50 per week, about $105 per month, and  $1,277.50 per year.   This seemingly insignificant daily cost amounts to a significant amount over time.  

Now think through all the different subscriptions you have and some you may even forget that you are paying for.   All of these ‘small’ expenses are detrimental to your bottom line.  As Franklin pointed out, ‘A small leak will sink a great ship.’ therefore, as you are reviewing your budget and all of your costs, do not overlook the small expenses.

Ideas for SMART Financial Goals to Beware of All Expenses

• Regularly review all expenses
• Compare expenses to the set budget
• Regularly review all subscriptions and cancel the ones not used

7   Enjoy Your Wealth

Wealth is not his that has it, but his that enjoys it.  – Benjamin  Franklin

Finally, through all the work of building wealth, setting up your retirement goals, and reviewing your expenses and budget, remember to enjoy your wealth.  

Figure out what brings you the most joy, and use your hard-earned money to bring that joy into your life.   If you want to travel, you can if you plan and budget for it accordingly.   If you want to take up a new hobby, you absolutely can. 

You do not need to have a large income to live comfortably.  The key is figuring out what is important to you and your loved ones and pursuing it. 

Ideas for SMART Financial Goals to Enjoy Your Wealth

• Put ‘fun’ into the budget
• Set money aside for hobbies

Top 7 SMART Financial Goals from Benjamin Franklin

1   Increase Your Income

2   Focus on Retirement and Savings

3   Find Work-Life Balance

4   Become Debt Free

5   Pay Close Attention To Your Accounts

6   Beware of All Expenses

7   Enjoy Your Wealth

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