Use these SMART approach to achieve your financial goals

ET Online|

Aug 25, 2023, 11:43:09 AM IST

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First step

The first step to begin financial planning is to define goals that you would like to achieve in the short, medium, and long term. A financial plan is then tailored around these goals. However, the goals cannot be vague, such as ‘I will buy a house when I have enough money’. Goals should be ‘SMART’: specific, measurable, achievable, relevant, and time-bound.

Text: Centre for Investment Education and Learning (CIEL)

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Be specific

Measurable

Financial goals should not be abstract. You should be able to quantify and measure them. Once the goal is measurable, you can track its progress and estimate how long it will take to accomplish it.

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Achievable

It is good to push yourself to the limit and aim big. However, financial goals should be realistic. They should take into account current income, expenses, and outstanding loans.

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Relevant

Your goals should be in sync with the overall financial plan, the current state of monetary affairs, and long-term aspirations. When goals are relevant, you will be motivated to work towards achieving them.

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Time-bound

To be able to fulfill goals, there should be a pre-decided time frame for the same. Unless the goal is timebound, it is likely to get postponed for other immediate priorities.

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Points to note

Goals need to be reviewed periodically to make way for changes, and new goals and the financial plan need to be altered accordingly.
An experienced financial adviser can help you set your goals.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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Use these SMART approach to achieve your financial goals - First step (2024)

First step

Be specific

Measurable

Achievable

Relevant

Time-bound

Points to note