How S.M.A.R.T. are your financial goals?

The top financial goals among Canadians are paying off debt, investing wisely, and planning for retirement.¹ Other goals include creating an emergency fund and setting a monthly budget. Whatever your goals—whether short or long term—taking a S.M.A.R.T. approach can help make your dreams a reality.

What's a S.M.A.R.T goal?

S.M.A.R.T. goals—specific, measurable, attainable, realistic, and timely—provide you with guidelines for setting achievable goals. Here's an example of a S.M.A.R.T. goal for creating an emergency fund.

Specific—Start an emergency fund and have 3 months' salary saved over the next 12 months. 

Measurable—Figure out your take-home salary over 3 months. Divide that number by 12 months, and every month deposit that amount into an emergency savings account.

Attainable—Add emergency fund saving to your monthly budget. Set up an automatic deposit to make saving even easier.

Realistic—Look at the amount you’d have to save every month. Is it realistic? Look for ways to cut your expenses to meet your savings goal.  

Timely—Work backwards from the goal: How long will it take to achieve? Is this realistic? Adjust the deposit amounts or the deadline if necessary.

What's so smart about S.M.A.R.T.?

Setting goals is about working smarter, not harder. The process of writing down your goals can help you clarify what's important to you—and what isn't. Once you know what you want to accomplish, you can manage your time and other resources better and track your progress along the way.

Tips for using S.M.A.R.T. goals

Write down your goals. Being able to see them can help you stay focused on the long term when short-term issues come up.  

Then answer the five "W" questions to fill in more detail in the S.M.A.R.T. checklist:

1 Who—Do you need to involve other people, such as your financial advisor and family members, to achieve this goal?

2 What—Fill out as much detail about the goal as possible. Using the above example, get personal about exactly what you want, including the amount of savings you'd need to reach that goal.

3 When—Set a target date or a timeframe for achieving your goal.

4 Where—Are there potential obstacles and challenges to achieving your goal? If so, where do they occur and what do you need to overcome them?

5 Why—Answering this question gets to the heart of your values: What's important to you about achieving this goal and how would you feel if you didn't? 

Better together: the benefits of working with a financial advisor

If you have a financial advisor or plan to work with one in the future, it helps to first get clear about your goals, priorities, and timelines. Having a S.M.A.R.T. goals checklist can make it easier to explain what your financial goals are and help your advisor work with you to create a meaningful and useful plan. Use this worksheet to get S.M.A.R.T. about your goals.

Saving and investing for different priorities and time horizons can be complicated. Working with a financial advisor can help you plan and prepare for your financial goals at each stage of your life. If you’re a Manulife group retirement plan member, your plan may include access to PlanRight® advisors at no additional cost to you. Check with your employer/plan sponsor to see if this benefit is part of your plan. 

1 Manulife Canada retirement study: stress, finances, and well-being, 2021.

The commentary in this publication is for general information only and should not be considered legal, financial, or tax advice to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.