Are your financial goals S.M.A.R.T?

Are your financial goals S.M.A.R.T?

by 5paisa Research Team Last Updated: Dec 15, 2022 - 01:05 am 20.4k Views
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One of the most important aspects of goal planning is goal setting. This post will go through how to define financial goals. S.M.A.R.T-ly.  

The first thing that springs to mind while saving and investing for your financial objectives is how much to save and invest. The best solution is to create goals in the S.M.A.R.T. approach. You may be wondering what S.M.A.R.T stands for. Let us attempt to comprehend.  

S.M.A.R.T. is an acronym that stands for Specific, Measurable, Achievable, Realistic, and Timely. As a result, anything that is not specified, measurable, achievable, unreasonable, or has no deadline cannot be labelled as a S.M.A.R.T goal. Even if a single requirement is not satisfied, the goal cannot be labelled S.M.A.R.T. 

  • Specific: The purpose must be precise, well-defined, and unambiguous in this case. 

  • Measurable: The goal may be judged in terms of requirements and progress toward achievement using this criterion. 

  • Achievable: Furthermore, the goal must be something that is attainable and not difficult to achieve. 

  • Realistic: This means that your objectives must be attainable and not unreasonable or unrelated to your life's purpose. 

  • Timely: The objective should have a clearly defined duration with a start date and an end date. The aim of this criterion is to assist individuals in prioritising their goals depending on urgency.  

Now let us go deep to understand each criterion in deep and understand how to achieve the same.  


Goals must be precise in this case to have a far better probability of being met. To make a goal precise, you must first ask yourself five 'W' questions: 

Who: Who is engaged in this goal or who is the goal's owner? 

What: What do I wish to accomplish? 

Where: Where will this goal be attained? 

When: When do I wish to complete this task? 

Why: Why do I want to attain this goal?  


This criterion seeks to make your objectives quantifiable so that you can track your progress. If the goal is not quantifiable, you will be unable to track your progress and determine whether or not you are on pace to meet your objectives. To make a goal quantifiable, ask yourself the following questions:

- How many or how much are there? 

- How do I know whether I've met my goal? 

- What is my progress indicator?  


If you want to achieve your goals in the S.M.A.R.T. style, they must be reachable. To determine whether a goal is attainable, you must first ask yourself: 

- Do I have the resources and ability to complete the objective? 

- Has it been done successfully previously with the same amount of resources and capabilities? 


A S.M.A.R.T goal must be sensible and within your reach in order to be realistically completed given your available resources and time horizon. To determine whether your objective is attainable, ask yourself: 

- Is this goal within my reach? 

- Do I have enough time and resources to complete this task?  


A S.M.A.R.T goal is always time-bound, with a start and end date. If there is no deadline for achieving the objective, there will be no sense of urgency or drive to do so. As a result, to make your goal S.M.A.R.T., ask yourself: 

- What is my goal's deadline? 

- When do I want to reach that goal?

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