6 Mistakes You Make Setting Financial Goals And Tips On How to Fix Them

 

With the new year comes new resolutions or recycled failed resolutions from the previous year.  Certainly hitting your goals will enhance our life…if you can just stick to your promises and hit the mark.

 

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Unfortunately, 25% us will abandon our resolutions after week one which means 1 out of 4 reading this have already thrown in the towel.  Another study says that only 8% of us will succeed at keeping our resolutions.

But eating healthier, working out more, reducing debt, traveling more, learning a new skill, starting a new business are good things to achieve.

If you want to increase your chance of hitting your goals, start by becoming aware of the 6 mistakes you maybe making in setting your goals and how to fix them.

(This is written in the context of setting financial goals and the top mistakes I see people make.  You can easily adapt this to any goal setting in fact this was in part adapted from one of Michael Hyatt’s presentations on general goal setting.)

1.  You create too many financial goals

Having to many goals can result in a lack of focus and often times some goals compete against each other.  Unless you make tons of money, it is impossible to save more for retirement, pay off your student loan and fund your kids’ college account at the same time and make meaningful progress.  Remember the ancient Chinese proverb:

The man who chases 2 rabbits catches neither!

Ask yourself what goals are most important to achieve.

Tip 1: Narrow your financial goals to 2-3 for 2017


2.  You don’t write your financial goals down

In a study conducted by Gail Matthews of Dominican University of California, it was found that you are more likely to achieve your goals simply by writing them down.

Writing a goal down makes it real as opposed to just thinking, wishing and dreaming about it.

Tip 2: Write down your financial goals


3.  You don’t make your financial goals measurable

Financial dreams and financial goals are two very different things.  Financial goals must be specific and concrete.  With setting a financial goal, be sure to quantify the goal.  In other words, make your financial goal measurable by assigning a number or percentage to the goal.

If you can’t measure it you can’t manage it.

Tip 3: Tweak your financial goals to make them measurable


4.  You don’t assign a deadline

Deadlines create a sense of urgency and they help  prioritize daily tasks.  A deadline will push you towards taking action. It will force you to think about all the steps you need to take to achieve your goal and force you to cut out distractions.

Tip 4: Assign a deadline to your goals


5.  You don’t identify the next action

One of the biggest challenges you face is procrastination.   A way to combat procrastination is to break your goal down into bite-sized pieces and focus on the next step.  Matthew Kelly in his book “Resisting Happiness” says procrastination is one way “resistance” manifests its way in our lives.  He defines resistance as the sluggish feeling of not wanting to do something that you know is good for you.  Make it easy for yourself and make the next step of reaching your goal clear and actionable.

Tip 5: Identify one next action step for each financial goal


6.  You don’t keep your financial goals visible

Out of sight, out of mind.  If you can’t see your goals regularly, it becomes easy to ignore them or worse, you may forget about them.

Tip 6 : Decide where you will display your goals and post them


Since I am writing form New Orleans I thought I’d throw in a lagniappe mistake and a tip on how to fix it.  This, in fact, may be the most important one.

7.  You don’t make you financial goals compelling

Pursue goals that really matter to you.  You’re setting yourself up to fail if your financial goals are not compelling TO YOU. Attributes of compelling goals are that they are: spiritually meaningful, intellectually stimulating, emotionally energizing, and physically challenging.  If your goals don’t touch on one or more of those attributes, start over.

Lagniappe tip: Evaluate each goal and make sure it is truly compelling and meaningful to you


If there is something bothering you about your finances, that is usually the best place to start with setting financial goals.

So ask yourself: “If there is one or two things you can change about your finances in 2017, what would they be?”

 

Read more about financial goal setting:

How To Set SMART Financial Goals

Eight Obstacles To Setting Financial Goals

Posted by Erik Garcia on Jan 17 , 2017

Erik Garcia
Erik is a New Orleans based Financial Advisor offering financial planning and fee based investment advisory services. Since graduating from Tulane University’s A.B. Freeman School of Business in 2001, Erik has worked with a wide range of clients from entrepreneurs to individuals and families specializing in helping them make smart financial decisions regarding savings, debt, and insurance as well as helping them make wise investment choices. Erik believes financial success is not only due to successful investing but more importantly healthy attitudes and behaviors towards money.