SMART goals

Wanting to "save more" is not a goal. It is a wish. The workbook gives a five-part test to turn a wish into something you can act on: a SMART goal.

Each letter fixes one way a goal usually fails. Specific fixes vagueness. Measurable fixes not knowing when you are done. Achievable fixes a target you cannot reach. Realistic fixes a target with no plan behind it. Time-bound fixes a goal with no deadline, which you can always put off.

A good financial goal passes all five tests at once, not just one or two.

The workbook sets out each letter with a wrong version and a right version, side by side:

Every right-hand answer in the workbook's own table adds one thing the wrong-hand answer lacks: a number, a date, or both. That pattern is the whole test — a SMART goal is a wish with a number and a deadline attached.

Deepak, 30, wants to buy a car. His first attempt at a goal is exactly the workbook's wrong example: "I will save money." It fails every one of the five tests — no amount, no date, no way to know if it worked.

He rewrites it: "I will save Rs 3,60,000 for a car down payment, by setting aside Rs 15,000 every month for 24 months, starting this April."

Check it against each letter. Specific — a car down payment, not "a big purchase". Measurable — Rs 3,60,000, a number he can track. Achievable — Rs 15,000 a month is real against his actual salary, not an aspiration. Realistic — he has already checked that his monthly surplus covers it, alongside his other goals. Time-bound — 24 months, starting a stated month. One sentence, five tests passed, and a bank statement that will tell him in month 24 whether he succeeded.

Chapter 3 (Financial Planning) introduces SMART goals directly after the statement that wealth is not built overnight, and gives the wrong-versus-right table for all five letters. Expect the acronym itself to be tested, along with a question that gives a vague goal and asks which SMART element it is missing.

• The fifth letter is Time-bound, not "Relevant". Some general SMART frameworks outside this workbook use Relevant; this booklet uses Time-bound. Answer from the book.
• Realistic is not the same as Achievable. Achievable asks whether the number is within reach; Realistic asks whether it fits your actual resources and other commitments, as the workbook's own example — clearing debt before building a reserve — shows.
• A SMART goal always carries a number and, usually, a date. An option with neither is not SMART, whatever else it says.
• SMART describes one goal at a time, not the whole financial plan; the plan is built from several SMART goals classified by horizon and funded through asset allocation.