How to set SMART goals

How to set SMART goals

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Avoiding the debt trap

“Alice: Would you tell me, please, which way I ought to go from here? 
The Cheshire Cat: That depends a good deal on where you want to get to. 
Alice: I don’t care much where. 
The Cheshire Cat: Then it doesn’t matter much which way you go” 
(Alice in Wonderland, Lewis Carroll) 


Saving and investing to achieve your life goals can seem like an overwhelming and formidable task. Setting financial goals is like having a roadmap to where you want to go to – you need to have a destination in mind, and a timeframe for when you need to get there. The first step to achieving investment success is to have clear goals and a sound financial plan in place. You need a SMART goal. 

A SMART goal for future financial freedom 

Get-rich quick schemes are just that – schemes to part you from your hard earned money with false promises of wealth and riches, for little or no risk or hard work. The reality is, building a financially secure future requires patience, discipline and a sound investment strategy. It can seem daunting at first, but you just need to know the basics, form a plan and be willing to see it through. 


How to set SMART goals 

A simple and effective way to assess your goals is to do the SMART test for setting goals. This involves asking yourself the following questions:

S: Is your goal specific? (a vague objective can be frustrating because you don’t know what success looks like) 
NO: I want to be wealthy 
YES: I want to be able to pay for a 4yr university degree for my child 

M: Is it measurable? (a measurable goal is one in which you can track your progress over time)
NO: I want to make as much money as possible 
YES: I need R100 000 to pay for university in 5 years time, taking into account increases in university fees 

A: Is it achievable? (success should not depend on impractical investment returns or saving or spending requirements
NO: I can do it if I win the lottery next year! 
YES: I have itemised my income and expenses and with some careful budgeting I can invest R1,000/month (insert own amount here) toward achieving my goal 

R: Is it realistic? (goals that can be reasonably achieved within a specific timeframe will help keep you motivated and focused) 
NO: I have no savings but if I invest in a get rich quick scheme to earn 50% a year I can do it! 
YES: I have already saved half of it so I need R50 000 to get to my goal within 5 years 

T: Is there a timeframe for my goal? (A clearly defined timeline includes a start date and a target date) 
NO: I want to get rich as soon as possible 
YES: I plan to grow my R50 000 to R100 000 over the next 5 years 

Having goals that are specific, measurable and realistic can help to focus your attention and make something that seems out of reach, actionable and achievable. An accredited financial planner can help you to develop the most appropriate savings and investment strategy to achieve your goals.