Become a SMART money manager – We’ll tell you how!

Anuradha C Personal Finance

As a part of our campaign to spread financial literacy, we at Shanthala Chits regularly bring you blogs on investments, expenses, loans & liabilities and other aspects of money management. Hope our readers find them as good reads.

If readers want any specific topic to be covered in our blogs, please write to us. And we’ll try and share useful information on the same.

Today, we bring to you a ready reckoner on SMART money management. In management parlance, SMART is a popularly used acronym to represent 5 important aspects of good planning and management. It stands for:

Specific, Measurable, Achievable, Relevant, and Time-bound

The acronym can be extended to define SMART financial goals in the domain of money management as well. So that’s what we are discussing today. How to set SMART financial goals – whether you are an individual managing your personal finances or an entrepreneur planning your company’s finances

SMART financial goals:

Specific – Setting a vague goal: “Cut down on my eating out expenses henceforth.” Setting a specific goal: “I’ll restrict my eating out to once a week” or “I’ll not spend more than 4K on dining out in a month.”

Goals must be clear and pointed. Just a general good intention is not a goal because it is not traceable to results. So setting specific, identifiable goals for each aspect of your finances is the first step. Have goals set for your income generation, expenditure control, tax saving, investment planning, emergency funds, long term commitments and medical contingencies.

Measurable – Financial goals must be measurable in numerical terms. How much money, for how many years, what percentage of one’s income. So if you are setting aside money for your children’s advanced education, work it out in measurable terms. For instance, if your child is 15 years old, then you’ll need the money 3-5 years’ time. Depending on whether the course is in India or abroad, work out the amounts to be set aside. Start carving out the required portion of your income right from today to meet the goal. Account for inflation, taxes and currency conversions.

Choose the instrument for investment wisely. FDs, mutual funds are common choices. We recommend investing in fixed tenure Chit funds. They give you clear measurable returns at the end of their 2-3 year tenure. They come with a major additional advantage of easy liquidity in case of emergencies. So if you need the money urgently for some other purpose, or there have been changes in your plans, you can pull out your money in easy steps, with no penalty whatsoever.

Achievable – Setting extravagant goals that sound impressive on paper are not a good idea at all. Such goals never materialize, and then you get discouraged from setting further goals. Set small, practical goals and strive to meet them. That sense of achievement acts as an inducement to make further goals. Take incremental steps.

For instance, you have a surplus income of Rs 2 Lakhs this year. You want to invest it for a vehicle purchase down the line. If you set a goal of doubling your money in 2-3 years, it’s not achievable by normal means. You will have to take unreasonable risks to meet such a goal. That can be completely counter-productive, risking your principal itself! Shanthala Chits always believes in keeping our customers well-informed about what kind of returns they are likely to make from their investments. Earnings from Chit funds are typically in the range of 7-10% year-on-year.

Relevant – There is no point in setting goals for events that don’t matter in your life or may not occur at all. Consider this for instance. Just because your colleague has been making close to 20% profit on the equity markets every year, that doesn’t mean you are going to be able to make that kind of money too. You have to consider your background knowledge on the subject, the initial capital invested, time of entering the markets, and so many other subjective reasons.

Make goals that are relevant to your needs, your income levels and your responsibilities to your family (or company).

Time-bound – Every financial goal must always have a clear end date/time period attached to it. Short term (within a year), medium term (2-5 years), long term (5-15 years), retirement goals (20 years and above) are the best way to categorize your goals into time periods.

A simple example of setting a time bound financial goal is – Set your Standing Instruction for credit card bill payment exactly 2-3 days after your salary credit, every month. This way, your credit will never default, and you will save on exorbitant penalties for delayed payments.

Inspired enough to make a beginning with planning your SMART monetary goals? Great. Or if you already have made financial goals, you can go back and check if they meet the SMART criteria. Good Luck with your financial planning!

ABOUT US

Shanthala Chits has been in the business of chit funds for over 2 decades now. We are a Government approved chit fund company with a 25 year successful track record and thousands of satisfied customers. Shanthala Chits is registered under the Chit Fund Act of 1982, Government of Karnataka. We are one of the most popular chit fund houses based out of Bengaluru, known for our customer satisfaction and secure investments.

Our Chit schemes range from a monthly contribution of Rs 6000 to Rs 1,00,000 to suit every budget. You can pick a chit scheme with an appropriate monthly installment for meeting several of your short-term financial needs. Our chit schemes are for a tenure of 25 Months. Get in touch with us and start with an investment scheme. We will be glad to help you out with the right scheme that matches your needs.

Anuradha C
Latest posts by Anuradha C (see all)

53 thoughts on “Become a SMART money manager – We’ll tell you how!”

  2. A high risk merchant account is essential for businesses facing industry challenges. Secure your transactions with a high risk merchant account that meets compliance standards. Trust this provider for reliable payment solutions tailored to your business needs.

  10. Продаем кругляк и пиловочник хвойных пород высокого качества! Идеально подходит для строительных и производственных нужд. В наличии различные размеры пиломатериалов: от досок до бруса, подробнее тут – продам пиловочник хвойных пород. Быстрая доставка и гибкие условия сотрудничества.

  22. Если смотреть с точки зрения профиля трубы, то все стальные трубы можно разделить на:
    Профильные трубы. Благодаря ребрам прочности подходят для каркасов легких металлоконструкций.
    Круглые и овальные трубы. Применяются для металлоконструкций, требовательных к гибкости и прочности.
    Если вам нужны надежные и качественные трубы для вашего проекта, обращайтесь к нам – https://truba4u.ru/

  26. Domick.ru, – это место, где вы найдете все, что нужно для поиска идеального жилья или коммерческого помещения, узнайте больше: новости недвижимости. У нас есть широкий выбор объектов недвижимости, и мы всегда готовы помочь вам найти то, что соответствует вашим потребностям.

  34. Ищете место, где можно расслабиться после тяжёлого дня? Сауны Москвы — это идеальное место для отдыха и релаксации. Здесь вы сможете насладиться паром, поплавать в бассейне и получить массу удовольствия. Узнайте больше на нашем сайте https://dai-zharu.ru/

  43. Бездепы — отличный способ погрузиться в мир азартных игр без риска. bezdep tg предоставляют возможность игрокам протестировать разные игровые автоматы и даже заработать реальные деньги при соблюдении условий бонуса. Для получения бездепа необходимо пройти регистрацию на сайте клуба и активировать промокод в личном кабинете. Стоит отметить, что все виды бездепозитных бонусов сопровождаются определёнными условиями использования: ограничение по времени.

  46. Армирование — это ключевой процесс внедрения арматуры в бетон, направленный на значительное увеличение прочности железобетона и его устойчивости к изгибам, растяжениям и другим видам деформаций. Железобетон с арматурой играет важную роль в различных строительных проектах, включая многоэтажные здания, мосты и инженерные сооружения. Без этого материала, укрепляющего бетон, невозможно представить строительство современных жилых, промышленных и инфраструктурных объектов.

    armatura-12.ru

  48. Стальной двутавр — это фасонный металлопрокат с Н-образным сечением поперечного профиля. Он изготавливается горячекатаным способом из углеродистых или низколегированных сталей при температуре 1200°C по стандарту ГОСТ 8239-89 https://dvutavrmsk.ru

  49. Ассортимент арматуры на рынке широк, и выбор подходящего изделия может быть затруднительным. Классификация металлических стержней помогает специалистам разобраться в технических характеристиках, областях применения и преимуществах различных металлопрокатных изделий.

    http://armatura-12.ru

  50. Двутавр — это тип металлического профиля, который широко используется в строительстве для создания несущих конструкций. Он имеет форму буквы “H” и состоит из двух параллельных полок, соединенных стенкой. Подробнее на https://dvutavrmsk.ru

  52. Thank you for your sharing. I am worried that I lack creative ideas. It is your article that makes me full of hope. Thank you. But, I have a question, can you help me?

Leave a Reply

Your email address will not be published. Required fields are marked *