{"id":1090,"date":"2022-03-25T06:31:34","date_gmt":"2022-03-25T06:31:34","guid":{"rendered":"https:\/\/shanthalachits.com\/investopedia\/?p=1090"},"modified":"2022-03-25T06:31:35","modified_gmt":"2022-03-25T06:31:35","slug":"become-a-smart-money-manager-well-tell-you-how","status":"publish","type":"post","link":"https:\/\/shanthalachits.com\/investopedia\/become-a-smart-money-manager-well-tell-you-how\/","title":{"rendered":"Become a SMART money manager \u2013 We\u2019ll tell you how!"},"content":{"rendered":"\n
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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.<\/p>\n\n\n\n

If readers want any specific topic to be covered in our blogs, please write to us. And we\u2019ll try and share useful information on the same.<\/p>\n\n\n\n

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:<\/p>\n\n\n\n

S<\/strong>pecific, M<\/strong>easurable, A<\/strong>chievable, R<\/strong>elevant, and T<\/strong>ime-bound<\/p>\n\n\n\n

The acronym can be extended to define SMART financial goals in the domain of money management as well. So that\u2019s what we are discussing today. How to set SMART financial goals \u2013 whether you are an individual managing your personal finances or an entrepreneur planning your company\u2019s finances<\/p>\n\n\n\n

SMART financial goals:<\/strong><\/h3>\n\n\n\n

Specific<\/strong> \u2013 Setting a vague goal: \u201cCut down on my eating out expenses henceforth.\u201d Setting a specific goal: \u201cI\u2019ll restrict my eating out to once a week\u201d or \u201cI\u2019ll not spend more than 4K on dining out in a month.\u201d<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Measurable<\/strong> \u2013 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\u2019s advanced education, work it out in measurable terms. For instance, if your child is 15 years old, then you\u2019ll need the money 3-5 years\u2019 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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Achievable<\/strong> \u2013 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.<\/p>\n\n\n\n

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\u2019s 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.<\/p>\n\n\n\n

Relevant<\/strong> \u2013 There is no point in setting goals for events that don\u2019t 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\u2019t 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.<\/p>\n\n\n\n

Make goals that are relevant to your needs, your income levels and your responsibilities to your family (or company).<\/p>\n\n\n\n

Time-bound<\/strong> \u2013 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.<\/p>\n\n\n\n

A simple example of setting a time bound financial goal is \u2013 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.<\/p>\n\n\n\n

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!<\/p>\n\n\n\n

ABOUT US<\/strong><\/p>\n\n\n\n

Shanthala Chits<\/strong>\u00a0has 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.<\/p>\n\n\n\n

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.<\/p>\n","protected":false},"excerpt":{"rendered":"

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 […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"class_list":["post-1090","post","type-post","status-publish","format-standard","hentry","category-personal-finance"],"_links":{"self":[{"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/posts\/1090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/comments?post=1090"}],"version-history":[{"count":4,"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/posts\/1090\/revisions"}],"predecessor-version":[{"id":1097,"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/posts\/1090\/revisions\/1097"}],"wp:attachment":[{"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/media?parent=1090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/categories?post=1090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/shanthalachits.com\/investopedia\/wp-json\/wp\/v2\/tags?post=1090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}