A Simple Guide for Your Next SMART Financial Goal

A Simple Guide for Your Next SMART Financial Goal

We all know that having a solid financial goal is crucial for our wellness. However, sometimes we do not know where to start. That’s when the SMART goal steps in and saves the day.

What is SMART?

SMART is a framework for you to plan your goals more efficiently. SMART is an acronym for Specific, Measurable, Attainable, Relevant, and Time-bound. By following this framework, you will have a detailed goal that is achievable, actionable, and can truly benefit you. In short, it will help you plan smarter!

You can check out this checklist not only for financial goals but for any goal you are making.

  • Specific: Is the goal's purpose clear?
  • Measurable: Is it trackable?
  • Attainable: Is it possible to do?
  • Relevant: Does it align with what you want?
  • Time-Bound: Have you set a deadline?

Different people have different financial requirements and circumstances. Some people want to save more money, pay off debts or student loans, earn more money, or plan for retirement. Still, when it comes to planning, there are some aspects everyone needs to keep in mind, no matter what the goal might be.

Today in DeeMoney’s blog, we will explore how to apply this framework to planning your financial goals while providing some useful examples.

SMART Financial Goals with Examples


Is the goal’s purpose clear?

You must understand why you want to achieve this goal since a specific goal is one that has an objective and a purpose. Ask yourself why you want to save money or why you want to earn more so that you can define the exact number you want to achieve. You may want to save money for a Christmas gift budget or save for buying a house. That makes a lot of difference in how much money you will set for your goal.


Is it trackable?

A good goal is a goal that is measurable or trackable. There is evidence for you to confirm that you are making progress. If the goal takes months or years to complete, make sure that you have milestones prepared so you can see how close you are to the goal. For financial goals, tracking by number or percentage is not very difficult.


Is it possible to do?

Before you complete making any financial goal, check your current situation first. If given what you have and your ability, is it possible to achieve your goal? An attainable goal decreases your proclivity to feel overwhelmed. You can check your current income, debt, monthly expenses, and health to determine how much you contribute for your goal.


Does it align with what you want?

It is better to recheck your life goal so that you won’t waste your time chasing after a goal that does not contribute to your long-life plan at all. Your financial goal should definitely be in line with your life goal since finance is an essential part of everyone’s life. Knowing that your financial goal will fulfil your passion or dream will boost your motivation and keep you from getting sidetracked.


Have you set a deadline?

A deadline helps you prioritise what to do first and when to do each task. It also enables you to track your progress, which corresponds to the Measurable part of a smart goal. More importantly, you can be sure that you are not going to procrastinate if you have set the time frame. Don’t forget to check with the Attainable aspect of your goal to see if the resources you have right now are sufficient for reaching the destination within the given time.

SMART Financial Goal Examples

Example 1: Saving Money for Travel


Dennis wants to make saving money her main goal this year. Aside from knowing that she wants to save money, she should know what her intention in setting aside this portion of money is. For this specific goal, Dennis wants to save money so that she can travel to Thailand. So, her goal is to save money for travelling in Thailand.


By making this goal trackable, the easiest way is to specify the number of money you need to save. She determined her medium budget to be around $50 per day. She plans to stay for 7 days, so her budget is going to be around $350. For the plane ticket, it usually costs her $800 to more than $1,000. Therefore, it’s safer to save a little bit more. She decides to save $1,200 for the plane ticket.

Her goal now is to save $1,550 for a trip to Thailand.


Next, Dennis needs to ask herself if she can save $1,550 or not and how to do so. After calculating her monthly expenses, including her house mortgage and money she needs to contribute to her emergency fund. She discovers that if she eats out less and cuts some unnecessary expenses, she can set aside $200 per month to cover her travel expenses.

So Dennis is going to save $1,550 for a trip to Thailand by saving $200 per month.


Dennis is sure that this goal is relevant to her as she has always been dreaming of visiting Thailand to eat local food but also live a bit more comfortably and luxuriously. Therefore, by establishing the medium budget, the budget is relevant to what she wants to do.

Dennis is going to save $1,550 for a trip to Thailand by saving $200 per month. This is aligned with her personal goal to get new experiences in the way she planned and is comfortable with.


As Dennis decides to save $200 per month, she will complete her budget within 8 months. Now this goal has a clear deadline.

Finally, her goal is to have a medium budget to travel to Thailand within 8 months by setting aside $200 per month.

Example 2: Saving for retirement


Morris is also planning to save money, but unlike Dennis, he is creating a New Year resolution goal for retirement savings. Therefore, his plan for savings is different.

Morris plans to contribute more money into his retirement savings.


To make his goal measurable, he aims to save 10% of his pre-tax income to retirement. So, the plan is to save 10% of his income for retirement.


Morris calculated that with his current monthly spending, he could set aside 10% of his income and be able to increase the percentage more after finishing paying the mortgage next year. He can easily set aside the money by deducting from his monthly income.


Saving for retirement is essential for everyone as it will create financial stability and security in the unpredictable future when it is unlikely for him to gain a stable income.


As he has his monthly income, Morris can set aside 10% of his salary and other income streams by the end of each month. He will continue to do so until the end of the year, as this is a plan for this year. After the end of the year, Morris will evaluate his action and decide how much he should save in the following year.

Therefore, Morris plan is to set aside 10% of his income each month in this year to contribute to his retirement savings.

Wrap It Up

No matter what financial goal you want to achieve, revising it with the SMART framework is a good idea to ensure you can achieve your goal, feel motivated, and be less likely to forget about it entirely.

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