The brain is designed to plan and problem solve, set goals and make targets and structure to create a vision our lives. This all helps us look forward and plan the future, reducing feelings of uncertainty. It’s no surprise that goal setting is linked to higher self-esteem, confidence and motivation. Goals can also provide a sense of security and make us feel in control, which are inherently good for our wellbeing. Plus, achieving goals can make us feel satisfied and give us a sense of accomplishment.
When it comes to finances, setting goals can help you feel in control of your money and make active decisions about how to spend (or not spend) your money. Financial goals can also help ensure we use our money beneficially, in a way that is important to you and aligned with your values – that helps build purpose and meaning in your life.
However, anybody who has ever set a New Year’s resolution knows how hard goal setting and achieving your aims can be. And on the flip side, how demotivating it can be when the goal slips away from us. Our brain is not always our ally when it comes to goal setting. It slips into old habits easily, seeking short term rewards out of whack with our goals.
So how can we incorporate goal setting effectively into our lives and give ourselves the best chance of achieving our goals, be they financial or otherwise?
Here are nine tips to help you out:
1. Consider and rank your goals
Write down the goals you want to achieve. Now think about which of these are most important to you and why. You can do this by rating them on a scale of importance from 0-10.
Choose the most important goals and think about how motivated you are to achieve each of them. Motivation is a good predictor of goal success, so it’s best starting with the goals you are most excited by.
2. Make your goals specific, measurable and realistic
Make specific goals that describe exactly what you hope to achieve. ‘I want to save money’ is not a specific goal. But "I want to save £20 a week instead of spending it on coffee" is.
How will you measure this so you know you have achieved it? For example, “I will save the X amount I spend on a daily coffee, which will total X amount by the end of the year”. It’s important to set measurable targets. And make your goals reasonable, so you’re more likely to smash them.
3. Set positive goals
Positive goals are much more motivating and likely to keep us on track. I will not spend money on coffee is a negative goal (and is also non-specific). “I'll save the £20 I spend on coffee every week” is both positive and specific.
4. Hold onto your “why”: your intrinsic motivation
Remembering why you are doing what you are doing can keep you on track - it helps focus your brain on the long-term purpose, rather than being pulled to short term rewards not aligned with your goal. For example, when you walk past that coffee shop, remembering you are forgoing your daily coffee because you want to feel more financially secure or want to save for something particularly meaningful can help you stay motivated and on track.
5. Identify any barriers before you start
Planning for what could go wrong can help you both proactively manage any barriers in your goal journey, and also help you feel prepared if it does happen. It can also help you redefine “failures” into problem solving opportunities.
6. Think about the end goal… but break this into the smallest steps possible
Start small. Breaking your final goal into small chunks is motivating, you’ll feel rewarded each time you hit a smaller goal. It also makes it feel much more manageable. For example, start by only saving the coffee money on a Friday. Then work up to incrementally bigger steps as you achieve each small one. By building up gradually, you’re more likely to incorporate the behaviour into your life successfully and reach your end goal.
7. Create a visual of your goal
This serves as a super motivating prompt and reminder. You can use the image below or come up with a visual of your goals that’s meaningful to you. Keep this somewhere prominent so you can refer to it regularly. Some people like to keep the visual on them, either in their wallet or on their phone, so they can refer to it and can check it off as they go along.
8. Set an accountability check-in
An accountability check-in is simply a way to make sure you evaluate your goals at a set time every week. For example, on a Sunday evening I will sit down and score my goal or mark of where I am on the visual. You can have an accountability check in with yourself. However, it’s even better if you can do this with someone else – it keeps us accountable. Whichever way you do it, remember to always praise and reward yourself when you achieve even a small goal. Rewards don’t have to be big or cost anything - checking it off your goal visual can be rewarding in itself.
9. Setbacks are just that: they set you back, they DON’T put you back to the beginning
Watch out for your critical voice when setbacks occur (they are inevitable). Setbacks are risky points where you might feel like giving up and fall into the trap of blaming and shaming yourself. Be kind to yourself and try to view little setbacks as learning opportunities. Remembering that they are normal - and that you are likely to get back to where you were far quicker than you did originally - can help keep you on track.