If you are anything like me, you try to multitask and do many things all at that same time. I have lately realized that I am not making much progress when I tackle activities this way. I have found myself beginning one task after another before ever finishing even one task. My efforts were inefficient, at best. I am currently trying to focus on one thing at a time until I take care of that task. So instead of washing the dishes and paying the bills while in the middle of ironing, I simply complete one activity, or goal, at a time.   It makes me feel as if I am actually accomplishing something and I am becoming more productive.

In personal finance, we teach the concept of SMART Goals. SMART goals are Specific, Measureable, Attainable, Realistic, and Time Bound.   It is very important that you set financial goals and that you make them SMART goals. Without goals, you won’t have a destination and you will only go in circles without a purpose just like I did when I worked on many tasks at once. You will be wasting time and energy because you aren’t working toward anything specific.

I like to illustrate the concept of SMART goals this way. Let’s say you decided to go on vacation. You pack your bags, load the car, and leave your home.  The decision as to where you were going on vacation was not made so you are simply driving randomly around in your car without direction or a destination. You know that you have to drive west, but you don’t know which roads to take. Sounds crazy, I know, but unfortunately, this is how many people handle their finances. They don’t have a plan for their money or their future and I assume that are just hoping for the best. Without a strong plan in place, they will probably never reach their goals. Here is where the SMART goals concept would come into play.


To begin with, SMART goals are Specific. In order to reach a goal, you have to determine what the goal is that you are trying to reach. If we just say we are going on vacation but we never decide were we are going or how we are going to get there, it is not a SMART goal. To make it Specific you could choose to go to Portland, Oregon instead of just saying you are going on vacation. Well, at least we know where you are going, but we don’t know when or how. How long do you think it will take you to get to Portland without any specific directions? How will you know when you have reached the goal?

Let’s make our example even more specific. Instead of saying you are going on vacation you could say you are going to Portland, Oregon, on November 8, 2015. That’s even more specific but we still don’t know if you are going to drive, fly, take a bus, train, etc.

Being very specific, the goal could be stated as: On November 8, 2015, we will fly from Shuttlesworth International Airport, Birmingham, Alabama, to Portland International Airport. We will stay in The Heathman Hotel located at 1001 SW Broadway. While on the trip we will visit the following attractions: The Pittock Mansion, the Oregon Zoo, the Oregon Museum of Science and Industry, and the Hoyt Arboretum.   Our return flight will be from Portland International to Shuttlesworth International Airport in Birmingham on November 14, 2015. We could list how we will be transported from the airport, the restaurants we plan to dine in, etc., to be even more specific. This would be a SMART goal.


The second component of SMART goals is whether or not the goal is Measureable. Is our goal Measureable as stated? What we mean here is can we measure the progress of our goal. From our goal above we can measure it because we will know when we have reached our goal when we arrive in Portland and stay at The Heathman Hotel then visit the attractions we listed.

Attainable and Realistic

For a SMART goal to be Attainable, and Realistic, it must be within our ability or our reach. If I told you that my goal was to be a first round draft as a linebacker in the NFL but I am only a 5’-5” female, I don’t know how to play football, and I didn’t play football in college, would this goal be attainable and realistic for me? We could honestly say that my goal is neither attainable nor realistic. Our goal of traveling to Portland is both attainable and realistic because it is within our realm of possibility.

Time bound

The final characteristic of a SMART goal is Time bound. We must have a certain time in place in which we plan to reach our goal. Just saying that I would like to retire someday is not specific. If, however, I state that I would like to retire by age 62, then I have made my goal time bound. When we stated that we would travel to Portland on November 8, 2015, our goal became time bound. If we do not travel to Portland on November 8, we will not reach our goal.

In my next blog, we will learn how to turn our financial goals into SMART goals.


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