Financial Goals

Six steps to setting meaningful financial goals

Do you set financial goals for yourself? I never used to be a goal setter (which most people who know me now may be surprised about), there was part of me that felt like it took the adventure and spontaneity out of life. But at the age of 25, when I was working at Goldman Sachs in London, the Head of the department led a workshop on goal setting and it completely changed my view. And now, quite frankly, I think that the idea of intentionality is the key to living a happy and fulfilling life.

I know that most of you probably are thinking that you already know how to set goals. But before we even get to the ‘how’, I want to get you to try and think about goal setting in a different way. First of all, it’s important that we don’t approach our financial goals from a place of feeling unhappy with where we are right now and think that achieving whatever it is will make us happy. I firmly believe that there is nothing outside of us that can make us happier. And so, you might then be thinking – what is the point of setting goals, if those external things are not going to make us happier?

In my opinion, the reason we should set goals is not to have whatever it is we want, but to become the person who we need to become in order to get it. The very act of setting goals (as long as they are quality goals) will bring up “stuff” for us and that is the gold – we need to observe our thoughts and feelings and physical reactions so that we can learn more about ourselves and our beliefs. That thing we desire is merely a guide towards the struggles we most need to overcome.

Since my first foray into goal setting at the tender age of 25, my process has changed and evolved. And so, without further ado, here is my process for creating meaningful financial goals.

Step 1: Start with your Values

What is the point of financial goals other than simply to facilitate living the life that you want? There is no point in creating a financial goal to “Set a budget” without firstly understanding what the underlying purpose of that is. And the best place to start is simply to ask yourself this question: What is most important to me in life? Make a list of 3 – 5 of your most important values and think about why that is so important to you. Is it security? Perhaps it’s freedom? Or is having meaningful relationships more important to you? It will be different for everyone. If you’re having trouble articulating what exactly are your most important values, you can have a look at this list for inspiration.

Step 2: Think Big

Once you’ve established your core values, this will create more of a guide for what kind of financial goals you want to achieve. If your goals don’t support your core values, ask yourself why not.

Now it’s time to think big! I don’t want you to think about what is “realistic” right now, I want you to really go crazy with thinking about what you want. The bigger the better! Imagine I was to tell you that there were no limitations (money, skill or other resources), what would you want your life to look life? Allow yourself to really dream without abandon. What comes up for you? Are there a lot of “I can’t do that” or “That’s impossible” or “I’m not good enough… talented enough… smart enough… young enough… to do that.”? If so, that’s GOOD! Question all of those doubts and work out whether those beliefs are limiting you, whether those doubts really are true or whether you’re just scared or believing someone else’s narrative. Clear it all out, listen to your heart and decide what it is that is most important to you.

Step 3: Want from Abundance

I’ve never really liked the word abundance. It always seemed a bit of a woo-woo mystical concept that the people from The Secret would bang on about. Now while I am open to accepting that there is A LOT that we as humans can’t explain, I do like me a bit of science. And I think when it comes to human psychology and behavioural change there is a lot of scientific data that backs up the effectiveness of managing your mindset. The problem is that I have never found another word that quite so perfectly encompasses the concept of having an abundance mindset – so I’m just going to run with it.

Having an abundance mindset is really just having the thoughts and beliefs that support the idea that there is more than enough to go around.

It’s the opposite to a feeling of desperation, competition and victimhood. It encompasses gratitude and awe and appreciation for what we have available to us – it’s actually really beautiful. And it’s a super important state of mind for creating more health, wealth and fulfilment in our lives – especially when we’re setting out goals.

Wanting from abundance is a way of calling in all of those wonderful positive emotions that are going to help you achieve what you don’t have, by first acknowledging and appreciating all of the things that you do have. If you look around at your life, all of the things that you own, have achieved and experienced were once things that you wanted. Acknowledge those things by declaring that you still want them. While it sounds a little bit like a gratitude exercise, it’s subtly different. Bring in the energy of wanting all the great things you have in your life right now, before diving into the next step.

Step 4: Get Specific

I’m sure you’ve heard this one before, but it’s super important to get specific with your goals. Your brain loves to have a clear focus and you’re much more likely to achieve your financial goals if you make them specific. The language you use is also very important  – you need to talk about your goals in the first person and framed positively. For example, instead of using negative language like “I want to not be in debt” reframe that is “I am going to repay the $15,214 I owe on my credit card by Christmas.” Using the S.M.A.R.T framework is a tried and tested method for improving your chances of success.

Step 5: Write it down

I confess, before writing this, I didn’t actually don’t know whether there was any scientific backing to this one, but it turns out there is. According to neuroscience, the primary reason that writing goals down is because of encoding.

Encoding is the biological process by which the things we perceive travel to our brain’s hippocampus where they’re analyzed. From there, decisions are made about what gets stored in our long-term memory and, in turn, what gets discarded. Writing improves that encoding process. In other words, when you write it down it has a much greater chance of being remembered.”

You can read more about that here. But for now, all you need to know is: write your financial goals down!

Step 6: Make a plan

The final step in creating your goals is to make a plan. If you don’t have a plan, you plan to fail, or so that annoying (but true!) saying goes. I know it isn’t the most exciting part about setting goals, but it is vital for your success. The best way that I know to make a plan is to ask your future self, who has achieved that thing, what they did to get there. Sounds strange, I know, but close your eyes and imagine yourself having achieved your goal, feel the joy and satisfaction and gratitude that comes from achieving it and ask yourself what you did to get there.

Tapping into that wisdom, then start breaking it down into what you have to do this year, this quarter, this month, this week. Then put all of those action points into your diary. If you don’t automatically know all the things you need to do, make your action item to find out. Schedule research, schedule meetings, schedule all the actions, big and small that you need to take to get to your goal.

Now that you have your steps, and they’re scheduled into your diary, get to work! I’d love to know – did you find this process helpful? Tell me in the comments below what big and small financial goals you are working towards. And for more info to help you achieve your goals, sign up for my newsletter, where I share tips and tricks that I don’t share here on the blog.

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