Why Monitoring Goals Matters Most, Ep #4

So many of us get charged up and rattle off an impressive list of goals but then struggle to follow through.

The disconnect between creating and accomplishing is where life change gets stuck. Months pass and we realize our lives are no different.

Where did progress stop (or never begin)?

Often, it's when life's curveballs throw us off our game. Even though we know the surprises will come, we're not prepared when they show up.

I thought about this recently on a Saturday morning, when my mind drifted to how enjoyable it would be to extend our screened porch. Wait, did this just become a goal?  What about the 10 year anniversary trip we want to take next year? We also know one of our cars will need replacing in a few years.  If we do all three of those things, will we be able to hit our charitable and retirement savings targets as well?

That’s just it. Financial goal planning is a fluid process.  You have to place a value on how important that thing on your mind right now is to the list of other priorities you've thought about on other Saturday mornings.

Without prioritization of goals, we allow our impulses to rule our decision-making.  This thought process ignores your plan, pushing the things that aren't as much "fun" to the bottom of your list.

Having an effective monitoring process increases your odds that follow through will happen.

Recording Your Goals

Many of us don't keep a running list of things we want to accomplish.  This is why when asked about our goals, we freeze and find it hard to get specific other than "to assure we are maximizing our investment returns."

Knowing why you want to get the best investment return helps keep the focus in the right direction.  It also helps identify quantifiable steps that will help you get there.

Goal setting begins with recording.  So often, I will be talking with someone that triggers an idea I want to pursue. If I don't get it down quickly, the idea is forgotten.

One of the most practical digital tools for this is Evernote.  This helps create a central location of all the ideas that are up next on the to do list.  From small goals to large goals.

Having a list, helps compare the newest goal to all the other goals you have in the queue.  For example, is the next home project more important than maxing your 401k this year? Depends on the person and what your long-term plan is. If retiring early is important to you, then 401k savings matters more now than a kitchen remodel.

We also know our desires can change quickly, which is why prioritizing regularly is vital.

This is why we encourage setting a few different lists.

Immediate - now to 3 months

Short-Term - within 2 years

Longer-Term - 3+ years

Some people like to add a lifetime category which helps shape more vision type of actions.  Are you doing the small (and sometimes mundane) things today that get you closer to the lifetime goals?

Assigning time-frames and dollar amounts helps you measure success.

Once you create the ideas of where you want to go, we discuss the best way to implement goals. Even though we all are incentivized differently, a process keeps us moving forward.

Monitoring

Some things are easy to implement and can be done very quickly (setting up Roth IRA contributions for example). But not every goal can be tackled quickly.

If your main goal is lowering spending, then it’s more of a gradual process that takes tracking and regular review. While a future large purchase requires diligence in hitting saving targets.

Consequently, we set up our systems so the top goals for each client are displayed each time we interact with them.

Some examples include next car purchases, home projects, inheritances, or retiring early.

But setting the goals is not enough. It requires consistent accountability partners. This is why we have automated follow ups along with scheduled phone calls to follow up. Checking in after 2 weeks, 2 months, 6 months and a year keeps the focus front and center.

Adjustments

Goals that are not measurable tend to fizzle out.

So after recording and monitoring, if a goal was too vague, it's time for an adjustment.

Personally, I like to revisit my goals every 90 days, which allows for any adjustments as changes arise.  At a minimum, reviewing your objectives at least annually will allow you to refocus any goals that are growing stale.

How Did You Do?

The end of a year presents a great opportunity to look back and see where you stand. Seeing progress motivates you to continue progress.

Personally, this process starts during the year.  I keep a document in Evernote, that is called “Key Accomplishments.”  During my quarterly review, I take a moment to record all the things I can think of that were steps forward.

This list includes it all (small and big accomplishments).  From wakeboarding for the first time to reading a book I've wanted to read.  You'll be surprised how fulfilling it is to look back after a year and see all you've done.

For next year, I plan to set a few stretch goals (from Steve Sanduski's podcast "Between Now and Success").  Goals that I know I won't meet but will motivate me to try.  I'm betting I will be surprised by the progress.

So what goals will you focus on this year?

Links Mentioned in Podcast: Evernote Publications in Press by Financial Symmetry during 2015 A Financial Planner's Estate Planning Journey Creating 3 Words for New Year - Steve Sanduski Belay Advisor Podcast