Setting SMART goals for 2022

New Year, new goals. While some of us make goals promising to refrain from drinking as much and finally use that gym membership, our investments shouldn't escape this scrutiny either. Our InvestSMART Bootcamp course explains goalsetting.
By · 13 Jan 2022
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13 Jan 2022 · 5 min read
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Setting goals, whether personal or financial, is well supported by scientific research. Many key elements of goal setting theory have been discovered and their relationship to success (Kleingeld, et al., 2011). Setting goals is associated with self-confidence, motivation, and autonomy (Locke & Lathan, 2006).

According to psychologist Gail Matthews' 2015 study, individuals who recorded their objectives were 33% more likely to achieve them than those who only think about them.

Make it SMART

If your goals are SMART (Specific, Measurable, Achievable, Relevant and Time-bound), you will have a better chance of achieving them.

Here are the things you need to think about in the context of SMART goals:

Time horizon How long have you got before you need to reach your goal?
Financial goal What funds are required at the end of your time horizon? Don’t forget that if your goal is years away, you need to account for inflation. In the case of a child’s education, the annual increase in fees may be higher than inflation. Your savings goal figure should be what you think you’ll need at the end of the goal’s time horizon, not what you need now.
Upfront investment How much you can afford to invest in your goal at the beginning of your time horizon.
Ongoing contributions How much you can afford to contribute to your goal each month.

Multiple goals require multiple plans

A goal that might cover buying a new refrigerator or paying off a specific debt differs from buying a home or planning a retirement that doesn't entail living on tinned soup.

Every goal involves estimating the amount of money needed to reach it, the regular savings amount it requires, and the time frame to achieve it.

You need a plan for each because multiple goals require multiple plans. The best way of organising your thinking is to separate them into short, medium and long-term goals.

A short-term goal (say, within three years) might be to pay off your credit card debt or save for a holiday.

Medium-term goals (3-10 years) might include saving a deposit for a house or paying off your HECS debt.

Long-term goals are generally focused on a secure and reliable retirement, things like paying off your mortgage or leaving an estate for your family.

Have a plan for each one, set automatic contributions for each of them to stay on track and don't focus on one goal to the exclusion of another.

Write it down and chart your progress

It is not enough to have a goal without a plan. And it is not enough to have a plan that exists only in your head. Write down your reasons for establishing your goal, the steps you need to take to achieve it and chart your progress along the way. If you find that difficult, chances are you aren't clear in your mind about the goal and how to reach it.

Monitor and review

Our time, energy, and willpower are limited, so having the intention to review our savings goals regularly isn't enough.

So, take your monthly savings goal review off your to-do list and schedule it as a recurring appointment in your calendar. That way, you won't have to choose. It's simply there as an obligation to carry out some action rather than a choice of whether or not to do so. Make it a habit, not a decision.

Tools & Resources

InvestSMART's Portfolio Manager can help. It's free and easy to use.

Wealth savings calculator

InvestSMART Bootcamp, a comprehensive investment course designed to get you started on the right foot.



Kleingeld, A., van Mierlo, H., & Arends, L. (2011). The effect of goal setting on group performance: A meta-analysis. Journal of Applied Psychology, 96(6), 1289-1304.

Locke, E. A., & Latham, G. P. (2006). New Directions in Goal-Setting Theory. Current Directions in Psychological Science, 15(5), 265-268.

Matthews, G. (2015). Goal Research Summary. Paper presented at the 9th Annual International Conference of the Psychology Research Unit of Athens Institute for Education and Research (ATINER), Athens, Greece.

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Tom Wilson
Tom Wilson
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