Marisol wants to save $6,000 for a car in 2 years. She earns $2,800 per month and, according to her budget, spends $2,500 per month. Which SMART element is most at risk in her plan?
ASpecific — she has not named the exact car model
BMeasurable — $6,000 is too vague a target
CAchievable — her current surplus may not cover the required monthly savings
DTime-bound — two years is not a clear deadline
Marisol's monthly surplus is $300. Over 24 months, that yields $7,200 — enough for the goal in theory, but only if every dollar of surplus goes to the car fund and nothing unexpected arises. Achievability is the element that requires scrutiny: the math works barely, leaving no buffer. The goal is specific ($6,000), measurable, and time-bound (2 years). Achievability is the one that should trigger a conversation about her other financial priorities.
Question 2 True / False
Financial goal setting is primarily useful for people who earn a high income, since low earners do not have enough surplus to meaningfully save.
TTrue
FFalse
Answer: False
Goal setting is about directing the money you have toward what matters most — it is a tool for allocation and priority, not a reward for high earners. Even saving $20 per month toward a specific goal produces more progress than spending it without intention. Small, consistent contributions also compound over time. The constraint of a tight budget makes deliberate goal setting more important, not less.
Question 3 Short Answer
Why is it recommended to set goals across short, medium, and long time horizons rather than focusing on a single large long-term goal?
Think about your answer, then reveal below.
Model answer: Short-term goals produce visible wins that sustain motivation, medium-term goals address needs within a planning horizon where amounts are concrete, and long-term goals build wealth for major future needs. Focusing only on one horizon means either losing motivation (if long-term only) or neglecting future security (if short-term only).
Behavioral research shows that people stay motivated when they experience progress. A 30-year retirement goal provides no near-term feedback signal. By layering goals across time horizons, you maintain motivation through short-term achievements while still making progress on goals that take years to reach. The three-horizon structure also forces you to explicitly prioritize competing needs rather than ignoring the ones furthest away.