Alice’s Goals Evaluation Using the S.M.A.R.T. Planning Model
An overview of financial planning process of Alice is figured out as an example. Alice’s goals are; to pay off her student loan, buy a house and save for children’s education, accumulate assets, retire, and travel around the world in a sailboat. So now, for evaluation of Alice’s goals there is need to use the S.M.A.R.T. planning model.
Specific; setting a specific goal is very crucial in every aspect of life so Alice’s goal is specific because after graduating from college, her short-term goals are to earn some income in order to provide her living expenses, such as food, clothes, house rent, gas, entertainment, etc… and to pay off her student loan of $53,000 within 2 years. Later, after attaining the short-term goals, within 2-10 years her intermediate goals are to accumulate assets, buy a house because she would have a family within the next decade, and save surplus money for her children’s education expenses. Her source of income for her intermediate goals will also be the surplus saving of her yearly salary. Finally, as her long-term goals, she would retire at her older age and derive all of the incomes from their accumulated assets. After retirement, if possible, she would travel around the world in a sailboat.
Measurable; the set goals of Alice is measurable because her digress or regress can be known through redefining of goals. In case, if she would not attain her short-term goals such as providing her life expenses and paying off her student loan from her salary income so she cannot begin to work on achieving her intermediate goals.
Attainable; her goals are attainable because either she can get a second, part-time, job and decrease her expenses. In addition, if she would like to take the risk so she can go to Las Vegas to play poker there. It’s mentionable that in case, if she would go to there so a high risk is waiting for her which might cause to give up other alternatives as well.
Realistic; her overall goals are realistic and relevant because her short and intermediate goals are the essential needs of life, while her long-term goals are expectable for her in her old age.
Timely; the times of her goals are mentioned for each of her goals, either that would be short-term goals, intermediate goals or long-term goals. In her short term goals, she would provide her life expenses and would pay off all of her student loan (possibly), in her intermediate goals, within 2-10 years, she would accumulate assets, buy a house, and save for her children’s education and other expenses, while at the end, more than 10 years goal, she would get retired, get her income from investments, and have a sailboat travel around the world.
I am precisely concluding the S.M.A.R.T. goals of Alice. Her goals are very specific (providing her living expenses, pay off student loan, accumulating assets, buy a house and save for children’s education, retirement, and to travel around the world in a sailboat), measurable (through redefining and evaluation of goals whether in digressed or regressed), attainable (through increasing more income sources such as getting another job, decreasing expenses, and doing investments in order to gain more income), realistic (the set goals are essential and expectable in life), and timely (goals are to be achieved within 2 years, 2-10 years or in more than 10 years).
Use the S.M.A.R.T. planning model and information in this section to
evaluate Alice’s goals (below).
a. pay off student loan
b. buy a house and save for children’s education
c. accumulate assets
e. travel around the world in a sailboat.