Exploring Financial Literacy 6 Copyright Goodheart-Willcox Co., Inc. May not be reproduced or posted to a publicly accessible website. Dollars and Sense SMART Goals The first step in creating a financial plan is setting goals for acquiring, saving, and spending money. Well-defined financial goals follow the SMART goal model. SMART is an acronym for: • specific • measurable • attainable • relevant and • timely. Use the SMART goal model to set short-term and long-term financial goals. Creating SMART goals will help you make wise decisions and eventually reach financial security. Are my goals specific? What do I want to achieve? Are my goals measurable? How will I know when I have achieved my goal? Are my goals attainable? Will I be able to meet my goals? Are my goals relevant? Will meeting these goals help me become financially secure? Are my goals timely? Are the dates for achieving my goals appropriate? S M A R T Goodheart-Willcox Publisher LO 1-3 LO 1-3 Needs and Wants Before you can set financial goals, you must determine your needs and wants. A need is something a person must have to survive. Examples are food, water, shelter, and clothing. One of your financial goals may be to have enough money to pay for your basic needs. In addition to needs, most people have many wants. A want is something a person desires but is not necessary for survival. Examples of wants include smartphones, cars, and designer clothes. Your financial goals will change throughout your life. Goals you set after your high school or college graduation may be quite different from the goals you will set after you start working and have a career. A financial plan is a work in progress and should be updated regularly as you meet goals and progress in your education and career. Check Your Understanding Why is it important to set financial goals? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________