How to set your goals – and achieve them
My belief is that you’re living your own life or living somebody else’s; either deciding what you want to do, or going with the flow to feed other people’s goals.
Take a typical workday: you wake up in the morning, have a coffee, go to work, come home and watch TV. In that time, you’re helping Starbucks cement its position at the top of the coffee chains; you’re helping your employer become a bigger, better company; and you’re helping Netflix towards global entertainment domination.
It’s not that those things are wrong – absolutely not. But what is it that YOU want to do? How do you want to spend the rest of your life? We have a finite amount of time on the planet and goal setting helps us squeeze the juice, the passion, out of the moments we have in this life. Goal setting makes sure we’re living life on purpose rather than just going with the flow.
In psychological circles, there are two types of people: those who set goals and move towards them; or those that wait for things to happen until they have to make a decision. These groups are known as ‘moving towards’ and ‘moving away from’ respectively.
Where to begin
The way to start your goal setting is with the big picture: how do you want your life to look? I call this your compelling vision. Think about the future. Who are you with, what are you doing? Write down just a few sentences that describe how you’d like to be living your life.
Sometimes that’s so far removed from where you are today, you have to bridge the gap by setting targets to get you there – breaking things up into much smaller chunks – which makes you ‘moving towards’. As the old joke goes:
How do you eat an elephant?
One bite at a time.
It’s all about the small steps you need to take to achieve your compelling vision, which might be a 10-year goal. So the next task is to work out your five-year goal, your three-year goal and your one-year goal, each of them steps along the way that incrementally move you towards your vision.
Then, go even further than your one-year goal: it’s still too long. How many people make a New Year’s resolution that’s over long before February comes around? Instead, make four mini-goals to break up Year 1, four ‘90-day check-ins’ along the way. This maintains your attention as it’s a more immediate way of planning.
In the example below I use vague terms, but you should use specifics as much as possible to make your goals relevant to you. We don’t want money – we want what money can give us. Your first thought of your goal might be: ‘I want to have £1 million.’ That’s fine, but it’s not burning enough, motivating enough. It’s not just about the money: what you really want is what the £1m gives you. So what is it you really want, what does your £1m do for you?
Financial advisors tend to look at money, but it’s not about the money, it’s about you; money is just the oil in the engine.
Compelling vision: I’m able to live my life without financial worries, and spend quality time with my children and family. I’d like to do this by the time I reach 60 years old, in 15 years.
- 10-year goal: to own my home debt-free, in a place we enjoy living, and we’re healthy.
- 5-year goal: my mortgage overpayments are on track to pay off my mortgage ahead of time.
- 3-year goal: I have £X invested, my children are enjoying their education, I’m spending quality time with my family and we take X weeks holiday per year.
- 1-year goal: my emergency reserve account is fully-funded, I have X number of months’ expenses saved, I have a will and power of attorney in place, I have life assurance that provides my family security in case of disaster.
- 90-day check-in 1: I will become financially organised and implement the bank account system.
- 90-day check-in 2: I’ve implemented the snowball overpayment plan.
- 90-day check-in 3: We’ve started saving each month to build up our emergency reserves and we’re proactively selling unwanted items around the house to add to the total.
- 90-day check-in 4: I’ve got my foundations in place and funded my emergency reserve.
The 90-day check-ins sound simple enough right? Good, because what we’re trying to do is build easy wins. Psychological momentum matters, and the more wins we can get, the more likely we are to succeed – that doesn’t mean succeed in attaining your compelling vision, it means succeeding by staying on the road. Moving towards.
Of course, you’ll make mistakes; we all do. But by having these smaller wins in play, you’ll keep going. Because if you just looked at the whole picture, you’d stop every time you had a setback and you’d never get anywhere. The vision is always present, but there’s a clear pathway to reaching it, not just a faraway dream that’s unlikely to happen unless we make it.
Goal setting and creating a compelling vision is the first thing you should do when you decide to get financially organised. It’s the first step because if you don’t know where you’re going, you won’t get there.