The fourth step in the financial planning process is to set goals. Goals do not need to be grand or complex. They only need to be statements of the results we hope to achieve.
For best results, write a prioritized list of specific, measurable, action-oriented, reasonable, and time-bound statements of the financial objectives you want to achieve in the future. Let us review the anatomy of a SMART goal.
A SMART goal is Specific.
It clearly states what must happen. It is definite, not vague. It is not a dream, a wish, or a fantasy. A SMART goal is specific.
A SMART goal is Measurable.
It has results that we can perceive, quantify, and validate. A SMART goal is measurable.
A SMART goal is Action-oriented.
It begins with the work “to,” followed by a verb. We must be able to do something about it. A SMART goal is action-oriented.
A SMART goal is Reasonable.
It is challenging, yet practical and achievable – not too high or low. We must use common sense to make rational judgments and not expect or demand more than is achievable. A SMART goal is reasonable.
A SMART goal is Time-bound.
It has an instant, a moment, a point in which it is finished. If we do not bind the goal in time, then it is merely a fantasy. A SMART goal is time-bound.
TIP: SMART goals are Specific, Measurable, Action-oriented, Reasonable, and Time-bound statements of the financial objectives we want to achieve in the future.
QUESTION: Have you written a SMART goal?
Chris Bryant is an American financial advisor.