UNIVERSITY OF THE PEOPLE

COURSE BUS 2204

TOPIC: PERSONAL FINANCIAL PLANNING

INSTRUCTOR: MADAM SCHAFFERT

The academic paper endeavors to look at the exercise on page 23 text book of personal finance.
In this paper the S.M.A.R.T goals will be used to evaluate Alice’s goals of paying off student
loan, buying of a house saving for children education, Assets accumulation retirement and
travelling around the world in a sailboat. In addition the paper will try to incorporate the smart
planning model for Alice’s goals and at the end a conclusion will be given. (Siegai and Yacht
2009)

In order to achieve our objectives and goals the S.M.A.R.T planning model is the best tool to
use. In the acronym, letter S stand for Specific, M for Measurable, A for Attainable, R for
Realistic and T for Timely (Doran,1981). It is a clear fact that Alice has a well-defined set of
goals as highlighted in the introduction. In order to execute the plan I feel that Alice was specific
in the sense that her program of action is well defined. For example paying off the student loan,
buying of a house, saving for children education, accumulation of assets and travelling around
the world in a sailboat are specific. In other words her dream is to achieve these goals
systematically.

Alice’s goals are also measureable in the sense that the amount needed for pay off of student
loan, buying of house, saving for children education, accumulation of assets and to mention but a
few is well known and how much money is needed to achieve such goals within a given period
of time.

It is also noted that her plan is very much attainable in the sense that she just need to continue
paying for her debts on an ongoing basis and at the same time reduce her expenses and save the
surplus. In addition a second job will help her increase her saving. This will help her meet other
financial obligation. In addition this will enable her to accumulate the assets needed for her to
achieve her goals (Siegai and Yacht 2009).

However, I feel that Alice is having the most financial challenges although her goals are clear
and concise. Therefore, there is a need for Alice to work extra hard in order to increase her
income so that she will be able to achieve the goals she has set for herself. As long as she follows
her plan, the goals are realistic especially when she understands her situation better in regard to
financial tasks. She just needs to think of an option to take that would make her goals a reality
especially looking at her income. Although, it seems that her earnings are enough to cover her
financial goals, it also seems that the surplus is very small to meet other expenses that may arise
in form of emergencies. In short I feel that with perseverance and sacrifice, her goals are very
much realistic.

In my own opinion I also think that in order for Alice to start travelling around the world with
sailboat, she needs to be free from any work commitment. Therefore, she needs to retire but
before that, she would need to accumulate a lot of assets as soon as possible in order for her to
achieve her goal her goals of travelling.

In short my evaluation to Alice’s goals I feel that paying off student loan, buying a house, saving
for children education and accumulating of assets for children education and accumulating of
assets qualifies for S.M.A.R.T goals because they are specific measureable, attainable based on
her financial status, realist and time bound. Pay off loan can be achieved at a short term of 1-2
years. On the other hand buying of a house, saving for children education and accumulation of
assets can be achieved on a long term of between 4 -10 years.

On the other hand travelling around the world is also a good goal, however I feel that it does not
qualify to be a smart goal because it is not specific, measureable, and realistic and not time
bound (Doran,1981).

In conclusion it is a clear fact that goals are set in short term, mid-term and long term. Like Alice
the goals should always be SMART meaning that they should help in planning your financial
goals and other goals. These smart goals may also help when you begin to face personal
challenges and other economic changes that can affect your goal. In short with smart goals the
plan becomes flexible enough to adapt to any challenge. (Siegai and Yacht 2009)

ss
REFERENCES

1. ssSiegai. R. and Yacht. C .(2009) Personal Finance. Saylor Foundation Licensed under creative
commons CC BY-MC-SA.3.D Retrieved.

2. Doran. G.T.(1981) There is a SMART way of writing Management Goals and objectives. Management
review Vol.70,issue 11,pp35s-36