Which of the following is an example of a SMART goal

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Which of the following is an example of a SMART goal?
A. Make more money in my career.
B. Set aside part of my paycheck each month to savings.
C. Buy a house.
D. Have a $15,000 savings account balance in two years.


The Correct Answer and Explanation is :

The correct answer is D. Have a $15,000 savings account balance in two years.

Explanation

A SMART goal is characterized by being Specific, Measurable, Achievable, Relevant, and Time-bound. Let’s break down option D to illustrate how it meets each of these criteria:

  1. Specific: The goal clearly states what is to be achieved—having a savings account balance of $15,000. This specificity eliminates ambiguity and clarifies the objective.
  2. Measurable: The goal is measurable because it provides a specific figure ($15,000). This allows for tracking progress; one can monitor how much is saved each month to reach the target.
  3. Achievable: The goal is realistic, assuming it is within the individual’s financial capacity to save that amount within the specified time frame. The individual can evaluate their current savings habits and income to determine if this goal is achievable.
  4. Relevant: The goal aligns with broader financial objectives, such as purchasing a house or preparing for future expenses. Saving $15,000 can serve multiple purposes, making it a relevant goal in the context of personal finance.
  5. Time-bound: The goal specifies a timeline of two years. This deadline creates a sense of urgency and helps prioritize saving over other financial activities.

In contrast, the other options do not meet all the SMART criteria:

  • A. Make more money in my career: This goal is vague and lacks specificity and a measurable outcome.
  • B. Set aside part of my paycheck each month to savings: While it implies saving, it does not specify an amount or a time frame, making it less effective.
  • C. Buy a house: This is a significant goal, but it lacks detail regarding the timeline, budget, or method of achieving it.

In summary, option D exemplifies a well-structured SMART goal, making it the most effective choice.

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