Teen Finance Class’s SMART Financial Goals

Many times, people fail to build large nest eggs because they do not have concrete goals or a plan to achieve them. One teen finance class in Oakland, Maryland is working to fix that for the next generation. In the Financial Management class at Southern Garrett High School, students are taught how to save using a simple mnemonic: SMART. Goals must be Specific, Measurable, Attainable, Relevant and Time-bound.Have you had trouble saving for goals like home ownership? Here are how each of these factors work:


It’s easier for people to save if they have a specific goal in mind. For instance, you can save toward a large goal like a down payment for a home. Or, you can pick smaller ones like a new car or a one-week vacation in a faraway place. Being able to visualize your goal makes the sacrifices needed in the short term easier to make.


Identify the number you will have to hit to meet your goal. Going back to the home ownership idea, start by researching prices for homes in your area. Then, decide how much you want to put down. If you are shopping for a $200,000 home and wish to have a 10% down payment, you will need to save $20,000.


Do not set goals that are impossible for you to meet. For instance, if you earn $4,000 a month but have inelastic commitments like rent and loan payments that eat up $3,800 of that, you will be unable to save $500 a month. The money simply isn’t there. Instead of picking an arbitrary number, look over your finances and pick a number that is realistic. You will be more likely to succeed.


If you have $20,000 in credit card debt, setting aside $5,000 for a Hawaiian vacation may not be the direction for your money. Choose goals that are most likely to strengthen your finances and improve your life. While fun goals can be motivating, you will not improve your situation if you do not target areas like debt reduction and building an emergency fund first.


An open-ended goal gives you too much leeway to procrastinate. Instead, set a date by which you want to meet your savings goal. Knowing that you want the money to start house hunting in two years makes that outcome more real to you. Having an end date also helps you decide how much to put per month toward your savings goal.

The SMART program is just one helping kids make better financial decisions as adults. Other school districts are beginning to make financial literacy classes required for graduation. As David Nelms, CEO of Discover told USAToday, “This isn’t calculus… this is one [subject] that 100% of the students are going to need to apply.”