5 mistakes people make setting financial goals
<p>In discussions around money and goal setting, people talk a lot about financial freedom. What does that mean to you, though? We might redefine money as ‘a unit of choice’, because the more money you make, the more choices you have. Everyone’s aspirations are different, which is one reason why there’s no one-size-fits- all approach to wealth.</p>
<p>It’s time to begin to understand what financial freedom means to you, because how on earth are you going to get there, if you don’t know where <em>there</em> is? How will you craft a strategic wealth-building plan when you don’t know what your target is? How will you know if you are making the right decisions in the right areas, decisions that are intentionally and systematically advancing you towards your outcomes. Here are some of the big mistakes I see people make when setting financial goals.</p>
<h2>Mistake #1: They have none!</h2>
<p>Without a goal, how will you know what to steer towards? You are left just ‘hoping’ that one day things will work out. With no clear direction to head towards, any actions you take are more or less random. You’re often left sitting idle and going nowhere fast, just swept along by whatever current comes your way.</p>
<h2>Mistake #2: They make them too big</h2>
<p>This might seem counterintuitive, especially since the typical conversation about personal development emphasises aiming for big, ambitious goals. And while these can be valuable, helping to elevate your thinking and giving you something inspiring to work towards, the problem arises when they are your only focus. Without smaller, achievable milestones to serve as stepping stones, the gap between where you are now and your ultimate goal can feel overwhelming. This can make it hard for your subconscious mind to fully commit, leading to procrastination or self-sabotage due to fear of not knowing how to get there. </p>
<h2>Mistake #3: They make them too small</h2>
<p>While small goals may seem manageable, they can lack the power to ignite your motivation or emotional drive or to be the catalyst that pulls you towards something greater than who and where you are in life right now. Small, uninspiring goals can make it easy to remain complacent. Without a purpose or vision that stretches you, there’s no real incentive to pursue them with passion. They don’t create the emotional connection that’s essential for driving sustained effort and overcoming obstacles. As a result, you may never fully commit to these goals, and they end up being more like tasks to check off a list than meaningful milestones on your path to success.</p>
<h2>Mistake #4: They are vague and wishy-washy</h2>
<p>When your goals are unclear and lack focus, they are difficult to achieve. Goals like ‘I want to be rich’ of ‘I want more money’ are too broad to provide any real direction. Without concrete details – such as specific numbers, deadlines or actionable steps – you don’t have a clear path to follow. Vague goals make it hard to measure progress or stay motivated, because there’s nothing tangible to work towards. As a result, your efforts can become inconsistent, and it’s easy to lose focus. Without clarity, you can’t point your actions in a specific direction, which makes it unlikely you’ll make any meaningful progress. A well-defined goal, on the other hand, creates a roadmap and keeps you accountable along the way.</p>
<h2>Mistake #5: They have no plan to make it real</h2>
<p>Setting a clear goal is undeniably important but it’s only part of the process. Just because someone says they want a specific outcome does not mean they will achieve it. Yet many people fixate solely on the goal itself, or they try to manifest wealth and happiness through the ‘law of attraction’ alone.</p>
<p>Most people spend 95 per cent of their time focusing on setting the goal and only 5 per cent on the actions needed to achieve it. Do you see the flaw in that approach? Instead, reverse the focus. Spend 5 per cent of your time defining the goal, and 95 per cent of your time working towards making it a reality. This is where having the right system becomes crucial.</p>
<p>How do we break free from impotent goal setting and instead craft a set of financial goals that are not only big, beautiful and inspiring, but achievable. By setting targets that are tangible and tactical and are going to set you up to win, you become more than who you are right now.</p>
<p>In the end, a goal without a plan is just an idea. A plan without a goal is simply directionless effort. It may keep you busy, but it won’t lead you anywhere meaningful. Both the goal and the plan must work together – one providing the destination, the other offering the roadmap. I always tell my clients they will never out-earn themselves. If you want to level up your results in life, you have to first level up as a person and raise the standards in how you choose to play the game.</p>
<p><em>This is an edited extract from Escape the Middle (Wiley $32.95) by Todd Polke. Todd is an investor, entrepreneur and international educator in investing and wealth creation. For over two decades, he has guided thousands of individuals in growing and scaling their wealth to achieve financial independence. Find out more at <a href="https://www.portfoliowealth.com%20" target="_blank" rel="noopener">www.portfoliowealth.com </a></em></p>
<p><em>Image: Shutterstock</em></p>
