That it reflects your current financial condition. As your personal and economic factors change, like when you get a big promotion, marry or have children, for example, you will need to revisit your current financial plan to determine whether it requires adjustments.

Our lives DO go through a lot of changes and cycles over the years, so that makes a lot of sense. It can be SO much work to properly create a well-thought-out financial plan, though…. Can you convince me and the women listening why we should bother?

In the simplest of terms, financial planning helps you keep track of your income, expenses, and investments so that you can manage your finances better and, ultimately, achieve your long-term financial goals. When you develop a financial plan, you go through a process that helps you develop a comprehensive picture of your current finances, determine what your long-term goals are, and then implement a variety of strategies to help you achieve your goals.
So, without a well-thought-out financial plan, you run the risk of not having enough put aside to help you reach your goals, like buying a home or sending your children to university, for example, or supporting you during your retirement years. Comprehensive financial planning also helps you to manage inflation and plan for the transfer of your wealth one day.

Those seem like pretty valid reasons to me. To be honest, I have long been convinced of the benefits of financial planning. I think it’s also important to remember that you are never too young or old, for that matter, to develop a financial plan. Every person, at every age, needs an in-depth and up-to-date financial plan to help them tackle and prepare for life's challenges.
So, let’s get to the goals part of financial planning, shall we?

I thought you would never ask! In undertaking the financial planning process, you will have undoubtedly determined a variety of goals. Each of these goals requires a plan to ensure it is adequately thought out and to ensure that you have the money and a systematic process to achieve them. Without a plan, you may find yourself spending more money than you should or, by starting too late, you may be unable to achieve one or more of your key financial goals, like retirement, for example.
Of course, financial goals come in a variety of shapes and sizes because they meet the needs of a variety of people. It’s important to remember that any financial goals you set should reflect YOUR personal goals, not those of your parents, friends, or hair stylist, for that matter!

Got it. But, what, exactly is a SMART goal then?

SMART is actually an acronym for the following:
• Specific
• Measurable
• Attainable
• Realistic
• Timely

Ah ha. That is very smart ! No pun intended….! Do you mind explaining them each in a bit more detail, please?

I’d be delighted to [host], as this is a topic that I am very passionate about.
The S for Specific is when you ask yourself what, exactly, you want to achieve. This is the time to get into the nitty-gritty of your specific goal so you can understand your intentions behind it. You need to know what you want and how much of it you want. You also need a reason why you’re doing this. A regular goal might be to build an emergency fund. But, with a SMART goal, you are encouraged to be more specific. Instead, an example of a specific goal might sound more like “I want to save Rs 5.0 lakh in my emergency fund so I can protect myself from unforeseen circumstances.”

I can really see the difference between the rather vague goal and the smart one. It sounds like what’s most important is to have a clear direction to get started. How about the M for Measurable?

Measurable goals are easy to track because they’re specific to start with. When goals are measurable, you can track their progress. Using the example of the emergency fund, you can make your goal measurable by defining how much and how often you will save. This might sound something like “I will automatically transfer RS 10,000 per month from my bank account into a high-yield savings account for emergencies.

That definitely sounds very measurable to me Now, what exactly does the A stand for, again?

The A is for Achievable. This is the point in the process when you ask yourself if your goal is attainable and if your action plan is reasonable. This is the time to think of any potential roadblocks in achieving your goal and to prepare a backup plan in case. Ensuring your goals are achievable will be largely dependent on your budget. One way to ensure your goals are achievable is to cut back on discretionary spending and look for ways to increase your income, for example.

That can be easier said than done, but I understand what you are saying, [guest]. So, what is the difference between Achievable and the next element of a SMART goal, Realistic?

Great question, [host]. A realistic goal means being confident that you can accomplish it. Setting a financial goal is designed to help you push yourself but be sure to set goals that are actually within reach. This is the part of the goal-setting process where you might have to make some tough decisions. For example, you might need to prioritize a goal of saving for retirement over that over-the-top vacation you have been dying to take.

Oh, I hate that part! But I do understand that life is all about making compromises. Few of us can have it all, after all! The last letter of the SMART goal stands for Timely if my memory
serves me correctly, Can you explain this in more detail for our listeners, please?

Yes, the Timely portion requires you to establish a deadline for your goal, as most goals need deadlines. Knowing your specific deadline helps you to stay focused by not being wishy-washy and saying, “I’ll save for that emergency fund as soon as possible.” My best advice when doing this is to think about short, medium and long-term goals and to plot the deadlines accordingly. Once you’ve figured out your goals, work them into your monthly budget and track your efforts to see how your goals actually fit into your everyday life.

It certainly sounds like SMART goals are not written in stone, and that you need to constantly revisit them. Is that right?

It is, indeed, [host]. I advise you to look at how you’re doing monthly and to make any changes or adjustments then. At the very least, you should revisit and revise your financial plan yearly to account for any changes in your life, income, etc.

Makes sense to me, [guest]. Just before we finish up, could you give us a few examples of common mistakes that women make when setting financial goals so we can try to avoid them?

Of course. Here are the top three most common mistakes:
1. They focus on the end result instead of how much they need to set aside each month
2. They set too many goals to being with
3. They get frustrated and give up when they are having a hard time staying on track

Well, we will definitely keep those in mind as we develop our SMART life goals then. The reality is that so many money problems are the result of people not clearly knowing what they want to do with their money and therefore spending it randomly. You can use the SMART goal strategy for a wide variety of goals, from saving for retirement, paying off debt, taking your
dream vacation, and so much more. As we begin a new year, there is no better time than now to
take some time to either establish or re-evaluate your goals. By setting SMART financial goals, you’re setting yourself up for success and will be more likely to see your dreams become reality.

Thank you!