Setting SMART Goals

Creating goals you can achieve? Now that’s smart.

About the Activity

Think about trying to use a GPS to go to an amusement park when you don’t have an address of where you are trying to go – that’s pretty much what happens when you make financial decisions without having clear goals in mind. And that’s also why it’s important to set SMART goals. SMART stands for Specific; Measurable; Adaptable; Realistic or Relevant; Time-bound, and in this activity kids will learn how to create them to enable their own financial success.

Grades: 9-12
Topic: Financial Planning
Estimated Time: 30 minutes

Brought to you by TD Ameritrade

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Supplies
These simple supplies are all you’ll need for this activity.

  • Scrap paper to write on
  • Pen or pencil
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Activity Steps

In this activity, we will create a SMART goal for an imaginary friend of ours, Ramon who is in 9th grade and is planning to go to college after high school. The goal we create for him will help him finance his college education.

  1. First, let’s talk about what, specifically, goes into each of the elements of a SMART goal.

  • Specific: The more specific your goal, the more you can see it.
  • Measurable: When it is measurable, you can accurately make a plan (such as how much to save each month) and determine your progress.
  • Adaptable: goals are ones that can change as your situation changes, the economy changes, or other factors change.
  • Realistic: While you always want to dream big, goals that are realistic help you to feel a sense of accomplishment when they are met. Otherwise you may find you lose some of your motivation when you fail to meet your goals.
  • Time-bound: Finally, your commitment to yourself is confirmed by the time frame you establish. By establishing a when, you create a firm deadline. This can help you to continue to prioritize your goals appropriately.
A girl working in her notebook
  1. Now, let’s get to know Ramon a little bit better:

  • He has good grades and plans to finance his education with loans and a work-study grant.
  • He would like to minimize the amount he has to borrow for living expenses and maybe even save money toward his last year or two so he can borrow even less or be prepared for life after college.
  • His parents want to help him, but have not been able to save money for him.
  • In order to meet his objectives, he needs to be able to have a car on campus to get to a job he has lined up for weekends and summers. It pays well but is not on a bus route.
  1. Now, on your scrap paper, list what Ramon’s objectives are.
    Did You Know? To enact a SMART goal, you:

  • Set your goal
  • Gather information
  • Compare your alternatives
  • Select the best strategy
  • Implement the plan
  • Monitor and review your progress
  1. Now, let’s define one SMART goal for Ramon to help him meet his objectives. In this case, let’s choose ‘buying a car in time for college.’
  2. Now, let’s see if this is a SMART goal:

  • Specific: buying a car is fairly specific, so we’ve done that.
  • Measurable: he will be able to measure the success when he has bought one car! So, we’re good there.
  1. Determining if a goal is Adaptable takes some planning, so let’s make that it’s own set of steps.
  2. Now, is this goal Realistic and Relevant? To understand that takes a little planning. First, we know Ramon needs this car to drive to/from his college job, so we can say it’s very relevant to his life. Next, with a real savings plan, we can assume he’s accurately figured out a savings play, it’s a realistic plan, too. To do that, though, let’s help him map out that plan:

  • Ramon needs to buy a car, and he’ll need money to do that.
  • How will Ramon get that money? By getting a job.
  • How much will that car cost? That will require some research into an affordable, preferably reliable car.
  • How much money will he need to earn to save enough for that car? Well, Ramon will need to figure out how many days a week he can work during the school year or the summers, how much money that job will pay, and how much of that pay he will save on a regular basis.
  • Once he knows how much he can earn during his high school years, he’ll know how much he can save – and how much he can afford to pay for a car at the end of his senior year of high school.

  1. Finally, is this a Time-bound goal? Well, he plans to buy the car by the end of high school, so that is definitely time-bound.
  2. Voila! We’ve created a SMART goal for our friend Ramon!

Reflection Questions
Bonus questions to inspire wonder.

  1. Do you ever save money to make big purchases?
  2. How do you know how much to save?
  3. How do you know how long to save for it?
  4. What happens if you cannot meet your saving goal?
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Investigate and Explore
Take what you've learned to the next level to learn more and explore the possibilities.

SMART goals can make your desires concrete, so you can measure your progress and more importantly know when you have gotten there.

Think of other common goals in life beyond college – what are some SMART that you have? What steps should you take to work toward these goals? Think about it, jot down some of your goals, then choose one and check it against each pillar of SMART goals – is it Specific, Measurable, Attainable, Realistic, and Time-bound?

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