SMART Goals = Achievement!

Jan 14, 2022 Personal Finances

Do you have money resolutions you're working towards? Get one step closer to reaching your goals by using the SMART method.

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With the new year bringing a fresh start, now’s an excellent time for reviewing goals: Are they still relevant? Is the goal on track for an on-time completion? Does the goal have a plan that works with currently available resources? As financial situations change, whether it be for the better or worse, the goals can be adjusted. Regularly reviewing goals is a great way to ensure goal realization.

The SMART Difference

Establishing financial goals is the first step to economic success, but this step is often skipped in favor of a quicker start. The SMART Goal methodology helps keep the goal alive long enough for completion. Here’s a review of the components that makes a goal SMART:

  1. Specific: Does the goal state exactly what will be achieved?
  2. Measurable: Does the goal have benchmarks that can be achieved?
  3. Achievable: Is this goal possible to accomplish?
  4. Realistic: Can the goal be achieved given the time and resources?
  5. Time-bound: What’s the timeline for goal accomplishment?

Goals that don’t use the SMART method are more like wishes than goals. For example, imagine you’re 21 and you wish to retire early. Here’s an example of a wish compared to a goal:

Wish: I want to retire early.
SMART Goal: I want to retire with $1.5 million in savings by age 55.

When asking the questions about the two goals, the first one doesn’t specifically address any of the SMART Goal components. There’s no specificity—what’s the thing we’re trying to address? Therefore, no clear plan can be derived from this simplistic statement. Here are the results of the SMART Goal:


When a goal becomes SMART, planning becomes simplified, and it’s easier to track progress. When taking the time to establish clear and concise goals, we can reevaluate the goal to ensure it’s on track for timely completion. For example, if you made a habit of evaluating your goal every year and found that you’re tracking a year behind, you have time to adjust. If you’re only one year behind, you can make simple and minor adjustments.

Adjustments may include increasing the amount or number of investment contributions, increasing the aggressiveness of investments, reducing expenses to allocate more money to investments, etc. However, if the goal isn’t specific and progress isn’t checked regularly, you may end up farther behind and have fewer options for adjustments.


Use our free calculators for your financial planning, including your budget, savings, debt repayment, retirement, and more.

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