Setting a proper goal is crucial for successfully reaching it.
The problem is not that we aren’t setting goals, but we are setting bad ones. It’s like embarking on a journey without preparation and a clear plan.
The end result? A journey filled with failures.
However, if you avoid these 5 mistakes and do it correctly, you will significantly increase the likelihood of success.
Now, let’s get started.
1. Too Many Financial Goals
Having too many financial goals can be counterproductive.
Unless you’re a multi-millionaire, you’ll unlikely be able to achieve it all. Also, too many financial goals can often lead to your money being spread too thin and you being unable to make significant progress. Moreover, the goals may act and compete against each other.
So, instead, you should rank them by what matters the most to you.
And the ones at the top, the most important ones, should be your focus.
2. Lacking Details & Planning
Saying you want to save $100,000 isn’t enough.
Your goals have to be specific, able to be measured, and within the realm of possibility.
For example, you want to save $100,000 for your children’s education in 15 years. Calculate the figures and how much you can set aside for this goal. Is the amount possible? If yes, fantastic. Then, what instrument (e.g., high-yield savings, index funds, stocks, etc.) do you plan to use to get there quicker?
So, we now have:
- A specific amount of $100k
- The targeted amount to be set aside is $6,667 per year (or $555 per month)
- A specific timeline of 15 years
- An instrument(s) used to reach this goal quicker
Now you know your numbers clearly, that it’s possible to achieve, and you have a plan you can implement.
3. Not Aligning Your Goals With What Truly Matters
The goals you set for yourself must be meaningful and important to you.
The idea of not achieving them should make you feel extremely uncomfortable. If your goals don’t motivate you to put in your best effort, you’re setting yourself up for failure, which becomes a waste of your time and effort. In such a case, you should strike that goal off your list.
So, make sure your goals align with what truly matters to you.
4. Setting Unrealistic Timelines
Unrealistic timelines will only set you up for failure right from the beginning.
Using the same previous example, instead of 15 years, let’s say you aim to save it in 5 years. Unless you’re a high-income earner, it is doubtful you’ll be able to save $20,000 per year or $1,667 per month. Knowing this, setting a goal with such a timeline reflects a lack of seriousness in achieving your goals.
So, be realistic about your finances and your goals.
5. Not Changing Or Adjusting Your Goals Along With Your Life
As we get older, our lives and circumstances will inevitably change.
Many of us will advance in our careers or start our own businesses, leading to increased earnings. Additionally, many will marry and start families, resulting in a significant rise in expenses. As a result, your financial situation and priorities will undergo drastic changes.
Thus, you would have to change or adjust your goals to align with your new circumstances.
Do It Right From The Get Go
Avoiding these 5 common mistakes will put you on the path to success.
Our quality of life depends on our reaching our goals. It is our responsibility to ensure we have the best shot at making our dreams come true. To do that, we have to give our best efforts in setting our goals right.
So, get it right the first time.
All the best!
