The SMART Way to Plan Your Finances

red-bg

The SMART Way

To Plan Your Finances

Taking control of your financial life requires planning, and that starts with setting goals. This is an important step to achieve financial freedom and if you aren’t working towards anything specific, you’re likely to spend more than you should.

How many surprises do you encounter in life regarding your finances; unexpected car problems, medical bills, house emergencies? Whether you want to pay off your credit card debt, save for retirement, or buy a house one day, personal financial planning is the key to achieving your goals.

One of the best ways to do this is through the SMART method.

The SMART Way

Way to Plan Your Finances

One of the best ways to do this is through the SMART method.

What is
SMART
?

SMART is an acronym which stands for:

Specific

Measurable

Attainable

Realistic

Timely

Be specific with what you want. Having specifics on how and when you’ll save up, makes it much easier to manage and grow your savings account.

First, ask yourself what you want and how much will that be. This is so you have a reason to focus on as you are building your savings. It can be anything, from starting an emergency fund or paying off a debt – by setting a specific goal, you’ll be able to focus on a solid target.

Make sure it is measurable. Write the figure down. When your goals are measurable, you can make checkpoints along the way to keep track of your progress.

Say you have RM3,000 of credit card debt to pay, set your goal at RM3,000 and work towards paying it off. Seeing your credit card debt shrink will also inspire you to keep moving forward.

Keep it achievable and not completely out of reach. While you want to make your goals big and a bit of a challenge, you also want to be careful to keep them in arm’s reach.

Ask yourself if you can stay on track and achieve your goals or if your plan is feasible in the long run? If you set your goals too high at the start, you might find it much harder to achieve your target. Therefore, take a look at your income and expenses to see how much you can afford to save.

While there might be some overlap between being achievable and realistic, the two are inherently different as being achievable means to ask the question of whether or not you can reach your specific goal either right now or in the future. Whereas being realistic is to ask if that goal makes sense for your situation now and in the future.

Setting realistic goals is also known as living within your means. Instead of saving RM1 million, challenge yourself to save a sum of money that your budget affords. Once you’ve achieved that goal, try setting a goal for a larger sum or for a longer period of time.

Make sure that they are timely goals that can keep you focused. By placing a timeline on your goals, you’re ensuring that you are taking action within a specific time period and this keeps you focused on your target.

Adding timelines to your goals helps you measure your progress by giving you ‘check-ins’ at regular intervals leading up to timestamp. They also help motivate you because every time you hit your ‘check-ins’ you are moving forward.

Now that you understand how SMART financial goal works, what’s next? Start putting that method to work and achieve that financial freedom you’ve been yearning for! Remember not to rush and trust the process.

All the best!

REFERENCES

https://www.wealthspire.com/blog/get-smart-personal-financial-goals

https://nomoredebts.org/blog/budgeting-saving/what-does-it-mean-to-set-smart-financial-goals

https://ringgitplus.com/en/blog/budgeting-saving/kick-start-your-money-goals.html

What is
SMART
?

SMART is an acronym which stands for:

Specific

Measurable

Attainable

Realistic

Timely

Be specific with what you want. Having specifics on how and when you’ll save up, makes it much easier to manage and grow your savings account.

Make sure it is measurable. Write the figure down. When your goals are measurable, you can make checkpoints along the way to keep track of your progress.

Say you have RM3,000 of credit card debt to pay, set your goal at RM3,000 and work towards paying it off. Seeing your credit card debt shrink will also inspire you to keep moving forward.

Keep it achievable and not completely out of reach. While you want to make your goals big and a bit of a challenge, you also want to be careful to keep them in arm’s reach.

Ask yourself if you can stay on track and achieve your goals or if your plan is feasible in the long run? If you set your goals too high at the start, you might find it much harder to achieve your target. Therefore, take a look at your income and expenses to see how much you can afford to save.

Setting realistic goals is also known as living within your means. Instead of saving RM1 million, challenge yourself to save a sum of money that your budget affords. Once you’ve achieved that goal, try setting a goal for a larger sum or for a longer period of time.

Adding timelines to your goals helps you measure your progress by giving you ‘check-ins’ at regular intervals leading up to timestamp. They also help motivate you because every time you hit your ‘check-ins’ you are moving forward.

Be specific with what you want. Having specifics on how and when you’ll save up, makes it much easier to manage and grow your savings account.

Make sure it is measurable. Write the figure down. When your goals are measurable, you can make checkpoints along the way to keep track of your progress.

Say you have RM3,000 of credit card debt to pay, set your goal at RM3,000 and work towards paying it off. Seeing your credit card debt shrink will also inspire you to keep moving forward.

Keep it achievable and not completely out of reach. While you want to make your goals big and a bit of a challenge, you also want to be careful to keep them in arm’s reach.

Ask yourself if you can stay on track and achieve your goals or if your plan is feasible in the long run? If you set your goals too high at the start, you might find it much harder to achieve your target. Therefore, take a look at your income and expenses to see how much you can afford to save.

All the best!

REFERENCES

https://www.wealthspire.com/blog/get-smart-personal-financial-goals

https://nomoredebts.org/blog/budgeting-saving/what-does-it-mean-to-set-smart-financial-goals

https://ringgitplus.com/en/blog/budgeting-saving/kick-start-your-money-goals.html

Our Products

Investment-Linked Funds

Life Protection

Medical Protection

Critical Illness Protection

Savings & Investment

Accident Protection

Property Solutions

Motor Insurance

Online Products

AIA Vitality

Employee Benefits

Commercial Insurance

AIA Vitality

How It Works

REWARDS & BENEFITS

Member’s Testimonial

Join AIA Vitality

How It Works

What Matters

Health & Wellness

Finance & Insurance

Video Gallery

Mental Wellbeing

Health Statistics

About AIA

About AIA Bhd.

About AIA Public Takaful Bhd

Career Opportunities

Community & Partnerships

Media Centre

Events & Promotions

About AIA General Berhad

About AIA Pension & Asset Management

CLAIMS & SUPPORT

Contact Us

AIA Panel Locator

Claims Process And Guides

FAQ

Important Announcements

Form Library

HOW TO GUIDES

How to guides

My AIA

CUSTOMER PORTAL

CORPORATE PORTAL

EN

BM

Contact Us

AIA BHD.

AIA PUBLIC TAKAFUL BHD.

AIA General Berhad

AIA Auto Assist/AIA Roadside Assist

The SMART Way to Plan Your Finances

The SMART Way

To Plan Your Finances

The SMART Way

Way to Plan Your Finances

What is SMART?

What is SMART?

Specific

Measurable

Attainable

Realistic

Timely

Related Articles

Can I Invest with only RM100?

My Journey to Financial Independence

Habits you can practice to Build Long-term Wealth

One Second Survey

One Second Survey

One Second Survey

What is
SMART
?

What is
SMART
?