MAKING SMART GOALS

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  Making SMART Goals
  “A life that hasn't a definite plan is likely to become driftwood”. This thought of David Sarnoff pretty much sumsup the importance of proper planning in our lives.
  Planning is bringing the future into the present so that we can do something about it now.Visualizing and taking the right steps at the appropriate time would be very crucial to the success of your dreams and goals in life.George A. Ford, many years ago, made some self-confronting questions which are still very relevant even today. These questions are in fact the gist of what planning is all about …
  
  ''Where do I want to be at any given time?''
  
  ''How am I going to get there?
  
  ''What do I have to do to get myself from where I am to where I want to be?''...
  
  ''What's the first, small step I can take to get moving?''
  The first very critical stage of any financial plan is deciding exactly where you want to be at a given time.
  Defining our goals smartly would be crucial to achieving them.
  

Ingredients of the SMART Goal:

Specific:

Goals such as "I want a Vacation Home," and "I want to retire young," really aren't goals, they are simply dreams at this point. Putting very concrete details around your dream will enable you to form a plan to help achieve it. For example, if you want a vacation home, where do you want it to be? Do you want a simple 1BHK
flat or a bungalow with a private garden? Being specific and identifying what you exactly need is a crucial first step of a financial plan.

Measurable:
Now that we know what we are looking for, the next question arises is – what is the price tag? Taking the case
of the Vacation Home, we need to ask questions like … What are the present property rates and how much is it
expected to increase till you buy it? How much are you wiling to spend? If you plan to take a loan, how much
down payment would you need?
Estimating the right price / cost of your goal or objective would help us make the desired efforts to achieve it.
Being measurable would also mean that we can compare the progress of our efforts with our goals and
regularly keep a track of it.

Achievable:
While defining the goal and determining the cost / price of your goal another important thing to be kept in mind
is the feasibility of achieving the same. Quite often, we hope for too much and then end up compromising and
not achieving the desired results. You should keep in mind your potential future savings, the variability in the
same to determine whether or not you would be able to make that required contribution needed for the goal.

Requisite:
The requisite or the need for a goal should be considered carefully before the goal. Further, you must also
define the priority for the goals. The goal of an exotic foreign tour for family may be less important than the goal
to buy an additional home. You may even go a step further and define the intensity of the goals. You may
define how much you are willing to sacrifice or under achieve your goals. For example, in case of a Farm
House, you would also define the bottom end of the budget apart from the ideal cost.
Quite often, the goals / objectives that you define may out weight your potential to make savings by far. In such
a case, your priority and the intensity for the goals would help you make the right decisions.

Time bound:
By now we are very clear as to what we want, how much we want, giving consideration to its measurability and
feasibility. We are also very clear as to the importance of such goals and their intensity. The next crucial thing
we need to know is the time frame within which we need to achieve the same. Care should be taken that not too
many goals coincide at the same time. Typically we may classify the goals into the following categories
depending on the flexibility of the time needed to achieve them …
Fixed time frame - E.g. Child Education and Retirement
Semi-fixed time frame - E.g. Purchase of residential Home, Car, Child Marriage, etc
Flexible time frame - E.g. Holiday abroad, Vacation Home, etc
All our goals work in conjunction with a timetable. Buying that vacation home in five years or 15 years makes a
big difference today. The more time we have, the more probability we have to achieve bigger goals. Ideally we
should first set the goals that have fixed time frame, then semi-fixed and lastly the flexible goals. The approach
should be such that the flexible goals should set such that they do not overshadow the more important goals
and be in such a way that we are able to smoothly achieve all our goals in an evenly spread out time frame.
Our goals are our dreams. It is our life and we should try to make more of it. By taking a little time and thinking
about our goals and objectives thoroughly would really be the first step in achieving them. If we haven’t set
SMART goals as discussed above, we probably do not wish or believe in achieving them. We all can have what
we desire in life provided that we take the actions needed