Goal setting – How you get there? Creating SMART goals

Business

Newsday

Yesterday

Goal-setting is important for your life, but how do you get there?

As an individual, family or business owner, setting short-term, medium- and long-term financial goals is critical to achieving the things you need.

Goal-setting is the blueprint or pathway for achieving everything you desire in life or in your business.

But in goal-planning, it is critical that you separate needs vs wants.

With no guiding vision or plan, you can tend to drift, may waste effort, or even cause chaos in your life.

Once you set goals, you tend to stay focused and as a result, achieve your desired outcomes.

So here’s some help to get started.

Short-term goals are those to be accomplished in a year or less, whereas long-term goals are for the distant future, usually more than five years.

For example, you may be saving for the down payment on a home that you plan to buy in a year, planning to start a new business in two years, or perhaps you want to provide university education for your children, who will be ready to attend in four years.

Maybe your goals are even longer-term, and you’re building a nest egg for retirement in 20 years.

Whether you are kick-starting your investment or already a seasoned investor, setting goals is the foundation on which long-term wealth is built.

Time is important, because the longer you have to achieve a goal, the more aggressive you can be in your investment choices.

Conversely, when you have less time, it is more prudent to consider lower-risk investments.

That is why the mnemonic SMART is a useful way to ensure the goals you select are motivating and more likely to be achieved.

SMART goals are:

S: Specific – Saying you want to buy a car is not enough. You must do the necessary homework to find out the price of a new car versus a locally used car and what makes better economic sense to buying line with your budget.

M: Measurable – Measurable goals can go a long way in refining what exactly it is you want.

Decide how much to put aside every month for your car and how long it will take to accumulate.

A: Attainable – You weigh the effort, time and other costs your goal will take against your other obligations and priorities.

Is the car that you would like to have attainable, given your income and expenses?

R: Realistic – The goal must be realistic. Can you afford an Audi or Benz when your salary screams frugality?

T: Time-bound – Every goal must have a timeline.

Timelines can be categorised as short (zero-one year), medium (one-three years), and long-term (three or more years).

The SMART methodology gives your goals form and shape, with clear-cut steps on how to make your aspirations a reality.

Goal setting as an entrepreneur

These days, a lot of people are venturing into entrepreneurship.

Not only is it empowering, but the additional income can go towards your savings and investment.

As an entrepreneur, as for anyone else, it is critical to have short-term, medium- and long-term goals.

It is very important to write down your vision of the long-term goal and set SMART short- and medium-term goals to attain this long-term vision.

Your vision may be to obtain a dollar-value amount in profits or obtain a certain number of customers monthly.

Your short-term goal may be to develop a digital marketing plan, hire more employees to fulfil orders or set up a business bank account.

All these goals will help you to attain your long-term goal of increased profits.

The path to achieving your goals takes time, serious thinking, disciplined effort and most importantly, patience.

By setting well-defined defined financial goals, you can take pride when you achieve them. And you’ll see progress in what might have been a long, pointless grind.

The TT Chamber of Industry and Commerce thanks the TT Unit Trust Corporation (a member of the Chamber) for contributing this article.