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The Financial Goal Setting Trap

Is financial goal setting really that difficult?

Well “If you don’t know where you are going, any road will get you there” to quote baseball great, Yogi Berra, says more about the problem with goal setting than most books on the subject.

In his quote, Yogi reveals the financial goal setting trap which many people fall into and the reason why they fail to get to where they want to go.

The problem is not that people fail to set goals. The fact is that most people do set goals.

We are all taught to do that early on from our parents, coaches, teachers.

The real problem is that, most of the time the goals are not clearly defined or they are not ambitious enough.

When goals are ambiguous or too easily attainable, they won’t spark the motivation that will truly drive a person to take action.

The same can be said for goals that are too ambitious, beyond the reach of a person’s capacity to achieve them.

In both cases, the goals may lack any true meaning and plans developed around them will not be taken seriously.

A financial goal needs to be clear and important enough to inspire a person to create a plan follow the road, and overcome obstacles.

To do that, a goal needs to be based on a vision one has of what achieving the goal will do for them and how it will make them feel.

Simply setting target dates and dollar amounts carries no emotional weight, but a goal that can be put into pictures that produce a feeling of well being becomes the emotional impetus to take action.

Set a Reach Goal and a Safe Goal

A reach goal supports your vision, but it may be just beyond your current capacity to achieve it.

Your primary obstacle may be current earning and savings capacity, but the goal is important enough for you to work to overcome the obstacle.

A safe goal also supports your vision, but it may be a scaled downed version, or set with a longer timeline to achieve it.

It’s a doable goal based on your current situation. As your situation improves and your savings capacity increases, you can ratchet up your safe goal.

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