SMART Goals

SMART goals summary:

• The SMART goals framework outlines criteria to help you set goals. 

• Goals that follow the SMART goals method should be specific, measurable, achievable, relevant, and time-bound. 

• Sometimes it’s hard to accomplish something when the goal isn’t clearly defined or realistic. SMART goals could help you create and reach your targets.

SMART goals definition and meaning

SMART goals are a framework of criteria that could help you set more effective, reachable goals.

The acronym SMART stands for:

• Specific

• Measurable

• Achievable

• Relevant

• Time-bound 

The SMART goals method could help you establish and meet your goals, including your personal finance goals. The SMART method helps you define exactly what you want, make sure it’s realistic, and figure out how you’ll track your progress. 

This goal-setting strategy could help ensure that you set and work toward attainable goals. It may also make measuring and monitoring your progress easier. 

For example, instead of a vague goal of paying off debt, you’d set a SMART goal like paying an extra $200 toward your credit card each month for the next year. This approach makes your goals clear, actionable, and measurable.

Key concept: SMART goals—specific, measurable, achievable, relevant, and time-bound—give you a framework for clear and attainable goals. 

More on SMART goals

George Doran, a former director at a Northwestern utility company, created the SMART goals approach in 1981. His method was intended to help managers set better workplace objectives. 

The SMART goals strategy is designed to help you create a roadmap with specific, realistic steps you can stick with. Checking your progress along the way keeps you motivated and shows you that success is possible.

SMART goals: a comprehensive overview

The goal-setting formula outlined in the SMART goals method could help you create and reach goals of all kinds, including financial ones. When you focus on financial goals that are specific, measurable, achievable, relevant, and time-bound, it could help you remain focused on what you want to accomplish, stay motivated, and measure your progress.  

Here’s how to follow the SMART goals framework when setting a goal: 

• Specific: Narrow down your goal to be more effective. 

• Measurable: Your progress should be measurable. 

• Achievable: Your goal should be reasonably attainable in a particular time frame. 

• Relevant: It should align with your values and long-term goals. 

• Time-bound: Give yourself a deadline to work toward. 

Real-life example of SMART goals

Here’s how SMART goals could look when you apply them to a financial goal. 

Brandon wants an emergency fund so he doesn’t have to panic if his car needs a sudden repair. Here’s how he uses a SMART framework to save money. 

• Specific. Save $1,500 for an emergency fund

• Measureable. Brandon can track his fund until he hits $1,500

• Achievable. Brandon could give up lunches out every day, setting aside $125 a month

• Relevant. Brandon wants to avoid taking on debt in an emergency

• Time-bound. Brandon decides he can save up the money over one year

Caitlyn has credit card debt she’d like to clear. Here’s her SMART goals plan for paying it off.

• Specific. Pay off $1,600 in credit card debt

• Measureable. Caitlyn can track her debt balances as they go down

• Achievable. Caitlyn could stop ordering dinner and cut three of her streaming services to come up with a $200 monthly credit card payment

• Relevant. Caitlyn wants to live debt-free

• Time-bound. Caityln chooses eight months for her pay-off plan