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How to set SMART Financial Goal ?

By: Makemymoney

Financial planning is a fundamental step that should be taken cared by every person. So when it comes to financial planning it’s very important to have financial goals. The very first step of making financial goal understands what your needs are and which one is required to fulfill firstly.

Not all but many of our goals are based on money. For example children’s education fee, higher studies fee, marriage function, new car etc. For all such desires, we have to do many years of saving. And so it’s important to have bifurcation and simultaneously focus on your financial goals.   

Word SMART has its own value if it has been defined appropriately. From financial goal perspective, the acronym of SMART is Specific, Measurable, Achievable, Realistic & Time-Bound. All 5 words stand with a substantial meaning in terms of the financial goal. Let’s understand how to be more focused when it comes to money goals.

 Specific:

It’s important to understand and plan, what do you want to accomplish specifically. For an instant, if you want to buy a new car & you already have one which is only 3 years old. At the same time, you have to make some insurance installments done. Then understand what is more important for you, specify your need for accomplishing the financial goal.

Measurable:

You need to track your requirements and needs. You have to measure you need between desire and requirement. For instant new car is your desire, however, you already have a car which is 3 years old and working absolutely fine. This is your desire. But at the same time, making installment payment is a compulsory requirement.

Actionable:

Now that you have sorted your desires and requirement specifically. It’s time to action your plan. Plan your steps for achieving the goal. Once you succeeded in setting the right action plan believe it, you have achieved half of it already. Right action plan plays a vital role in rolling out all your success steps.

Realistic:  

Make your goal realistic, and try to complete it within the allotted time. If you fail to achieve the goal within outlined duration then redesign your working structure. Make a realistic approach by understanding each requirement properly.  

Time Bound: Set a time slot, by when do you want to achieve your goal? If you are planning to buy a car, house, higher studies etc then set a time for it. Make sure you are getting closer & closer with each passing day.

Schemes for saving money

There are various government and non-government schemes where you can invest from a future perspective. Government is coming up with various new financial plans. All these plans have a distinct time limit. There are short plans and long-term plans as well. Like post office saving account scheme, National Saving Certificate (NSC), Kisan Vikas Patra (KVP), Public Provident Fund (PPF) etc. You can check, various NBFC’s, banks and financial institutes offer Mutual Funds and SIP.

Time for Action:

If you have still not set a SMART Financial Goal, then it’s high time for you. Whatever saving you’ll do today as per your financial goal, only that will flourish in future. Many investors priorities tax, however tax saving should be secondary. Remember one should plan investment by keeping in mind goal specific requirement.  

 

 

 

 

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