Personal Finance

5 SMART ways to Set Financial Goals

Someone wisely said “A Goal that are not written down, are Just Wishes.”

So, why not make those wishes a reality by rectifying the errors which are coming in between you & your wishes/dreams.

Let’s understand, what 5 things one need to do to fulfill their wishes smartly, if it can be link to a monetary assets or 5 SMART ways to turn Financial wishes into a specified set Goals.

1. Specific (Goals should be Clearly Defined)

The foremost thing before setting any financial goal is to specify the goal. What exactly the goal is? For example: Want to buy a luxurious car or want to achieve Financial Freedom. Here all these are the goals but not the Smart goals for that read other steps

2. Measurable (Goals can be measured in Monetary Terms)

Once the goals are specified clearly, the next step is to measure these goals in terms of its cost. How much would it cost today – if you have that much of money? or How much would it be cost you in Future – if you didn’t have that much money now? One need to ask these questions to themselves while defining goals. It will help in channelizing the goals into a monetary value.

Read our Article: How can budgeting help you to keep track record of your expenses?

3. Achievable (Goals should be attainable/approachable)

After measuring the goals in terms of money, the next crucial step for setting the financial goal is to achieve it. So, define the steps you would be needed to achieve the said goals. For Example: I want to buy a Luxurious Car which cost $10,000/- today and I only able to save $200/month. So, it won’t be possible until the goal is achievable and realistic.

4. Realistic (Goals shall be based on facts & Figures)

Goals shall be based on facts. If the goal is to buy a luxurious car then, make sure it is in your budget. Having a budget helps in making the goals realistic. Thus, buying a luxurious car can only be possible if you are able to afford & maintain it. Thus, make the goal realistic on the basis of how much amount you can save or what steps you need to take to achieve the said goal? These questions will help you in determining the time which makes the goal smart.

5. Time Bound (Goals are worthy if it is linked to specific period)

Last but not the least, the goals should be time-bound. Having a Goal is good but it won’t be complete until or unless it is linked to a specific time period. Therefore, set a time period or determine how much time will it be taking for you to approach that goal. For Example: A Smart Goal is “I want to Buy a Luxurious Car After 5 Years which is currently cost $10,000/- and for that I’m saving $100/month.”

All these 5 SMART steps will not only help anyone in defining the goal but also motivates them and clear all their stress related to the achievement of any Financial Goals.

As says,

A dream written down with a date becomes a goal. A goal broken down into steps becomes a plan. A plan backed by action makes your dreams come true.” – Greg Reid

Also Read: How can Financial Planner help you in attaining Financial Independence?

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