Don’t focus on your goals, focus on systems instead. You might get better results, and be happier along the way.
Everyone who has ever gone to the Olympics wanted to win. They worked their entire lives, focussed on their goal; a gold medal. They set targets, had plans created for them by highly skilled coaches, they worked night and day, trained tirelessly, passed local, regional and then national competitions. They were selected as the best in the country and allowed to compete internationally. Every Olympics, about 11,000 people compete, and 10,660 of them go home without a gold medal. They lost.
While goal setting is hailed as the way to achieve greatness, in reality, most of us will never reach our goals. Most people fail. And that’s not just for Olympic level athletes; this is about you. Conventional advice is about setting targets and goals and then achieving them. Research now says maybe you’re better off… to not.
Why Might Goals Not Work?
There are a couple of ways that goal setting might make you less likely to reach your targets.
Setting a Direction but No Strategy
People often set a goal but not the system needed to get there. For example, you decide that you are going to clean your house, and keep it clean for the year. You spend a day organising, scrubbing, and by the end of the day, you have a spotless house. Then, your life resumes, the toddler or teenager awakens, living happens, and in a week it’s back to the same state.
That goal only works for a hot minute. You achieve it and then what? You haven’t changed your systems, so the problem is just going to keep coming back. To achieve that goal, you need to declutter, find a home for every object, train your kids and partner, and work daily towards the end goal.
Failure Leads to More Failure
We are told that goals equal success. But we know it’s impossible for everyone to reach their goals. Like those Olympic athletes, we all will have a bitter taste of failure in our lives. And when we fail, we find it hard to get back on our feet and try again.
Say you decided to save $500 each month. At the end of the month, you’re looking at your finances and realise you’ve overshot your spending and you only have $400 to save this month. You feel bad about it, and then shrug your shoulders and say, ‘oh well, since I’ve already blown my budget, might as well go out for an expensive dinner’. You failed, you’re disappointed, and you engage in self-destructive behaviour that takes you further from your goals. Ouch. And studies show that sting of failure actually makes you less likely to succeed next month too.
Achieving Goals Doesn’t Equal Happiness
If you’re a goal-setter-and-achiever, you’re just chasing your tail. You reach your goal and expect happiness. Instead, you’ve simply got the next goal or milestone to chase. You’re stuck in a hamster wheel of happiness procrastination.
We can’t apply a success/ fail judgement to everything we do because there is no one way to happiness and fulfilment.
Goals May Limit Success
Imagine you decide to run a half marathon. You train and run your 21km in a good consistent time. Congratulations and now you can sit on the couch. Your motivation, unless you continually reset your goals, is over and you can revert to that non-running self. Back to square one.
Instead, Set Up Systems
When you enjoy the process instead of the product – the journey and not the destination – you’re more likely to be perpetually happy and satisfied. The process is in place, and success can happen in many forms along the way, and perhaps in ways you did not expect.
Once you’ve completed that half marathon, keep up the running and you might be surprised what happens. You could fall in love with hill running, or your long run might get longer until you realise you’re running 30km with equal splits.
The systems will succeed when you fail. They’ll carry you through disappointments and keep you going to that next level.
How Does This Apply to Money and Savings?
You should sit down and think about your goals. Yes, you do still need something to aim towards, something specific to you that you want. When do you want to retire? Where do you want to travel to? What boat/ car/ bike do you want to buy? Real goals are the things you want to own, do and achieve, and they will all have a financial impact.
Now that you have a goal, it’s time to think about the process and systems to get there.
Think about the how, not the goal itself. For example, if your goal is to have more time to spend with your family, you can achieve that in many different ways. You could work less hours. You could hire a cleaner. You could relocate to live closer to your work to cut down the time spent commuting. All of these strategies affect your finances in some way and need to be carefully thought through.
Systems and processes support your chosen strategy. Want to work less hours? Set up savings schemes and ‘watch the money pile up’. Take enjoyment from being able to autopay the bills every month and no worries about your card declining. Watch your bank account grow and enjoy transferring it to investment accounts, deciding which risk profile, which term to create passive income so that you can cut back on your working hours without diminishing your lifestyle. Revise your budget regularly, and continually refine and improve your strategy, systems and process enjoying those milestones along the way.
You’re more likely to reach your goals, and you’ll be happier along the way.
What Does Your Financial System Look Like?
This entirely depends on your life, your goals, and your personality. What works for one person may not for another. If you don’t know how to set up good financial systems, call us at Smart Adviser. We may be able to help you set yourself up for success, and also happiness along the way.