Why Do We Bother Setting Goals?

13406336_sWell it’s in our DNA.

The fact is we live in an aspirational society where we are very interested in becoming better versions of ourselves.

The numbers back this up.  Just type “Setting Goals” in a Google search and you see 128 million results. Some are more interested in reading about it as $549 million is spent each year on self-help books.

It’s About The Process

I once read an inspiring story about the coach of the Miami Hurricanes basketball program, Jim Larranaga, and his process that helped a historically underachieving basketball team make an unexpected rise to the top of the ACC basketball standings in 2013.  The most interesting part of the story focused on the meticulous nature of the Coach’s goal-setting process.

In his desk, he keeps two decades worth of daily planners where he records what he expects to happen each year, one of which was the success of the 2013 season for the Hurricanes.

Now I’m not suggesting we begin scribbling down every goal that pops in our head, but there are lessons we can learn from the Coach.

When Do You Feel The Most Motivated?

As financial advisors, we meet with people that are facing big life events that necessitate change (marriage, new baby, retirement, graduation).  This is because big life changes cue a strong emotional response to become more prepared.  But what about those less “urgent” to-dos? The monitoring of our expenses, the updating of our will, the directing more of our savings to retirement accounts.

How do we conjure up the motivation to put a checkmark by these items on our list?

We’ve found a helpful exercise is looking back and diagnosing the behavior that might have prevented you from reaching the place you thought you would be today.  By applying incremental advantageous changes in your financial routine, you position yourself to make smarter money choices.

Some of these recommended changes will be transactional, like converting $x to your Roth IRA or adding a contingent beneficiary to your retirement accounts.  These can be accomplished quickly with a click of a mouse or a phone call.  Others are behavioral, like beginning to track your expenses regularly to comparing back to a target or teaching yourself to think of a drop in the stock market as an opportunity, and will take longer to implement.

3 Ways to Move in the Right Direction

Here are a few ideas we discuss to help in this process:

  • Tackle the hard things first – Our tendency leads us to check the quick and easy tasks off of our list first and put off the ones that will take more time. Like doing a monthly review of your spending.  This can take as little as 15 minutes if you have a process in place and a target to compare back to.  The road block occurs in the time it takes up front to plan and establish targets by examining our current habits.
  • Broadcast your goals – By telling others what you want to accomplish, you create relationships where the probability of being held accountable is higher.  Reminders are great motivators.
  • Keep the end in mind – It’s fun to envision our dreams of where we hope to be.  This can be a positive momentum builder for putting a process in place to get there.  For most people, a burst of encouragement occurs and then fizzles out within a few weeks.  Envision what life will be like if you hit your targets.

Making daily steps towards the financial life you desire results in more flexibility down the road. And flexibility equals opportunity.

Henry David Thoreau summed it up with, “What you get by achieving your goals is not as important as what you become by achieving your goals.”

What are some of the best methods you’ve used in setting and accomplishing your goals?

 

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