In another recent article I discussed three key attributes of financial planning. One of these attributes of a successful financial plan is that it’s goal-oriented. Simply put for a financial plan, like almost any other type of plan in life, to be most useful it helps to have a goal or various goals in mind for the journey ahead.
The best plans have a goal in mind.
I understand this fact perfectly well and yet there is one area of my life that I used to consistently fail to set a proper “goal” before executing my “plan”…the quick run in to the grocery store.
I can hardly count the numerous times that I’ve been asked by my wife, prior to leaving the house for the day, to grab something from the store on the way home from work that evening. Still, I have repeatedly neglected to write down whatever happens to be the item of the day and so have found myself in the middle of a store, after work, humbly texting the same question again, “what was it you said we needed?” Then, roaming aimlessly while waiting for the answer to come through.
The fact of the matter is, clear, specific, and concrete goals matter in many areas of life, especially in regard to planning your financial journey ahead.
The range of goals that people have for their financial journey can vary widely.
- For some, it’s simply living in retirement the way they are now but without the support of a paycheck.
- For others, it’s the ability to go, see, and enjoy things they’ve been putting off for years.
- For others still, it’s utilizing their resources to make an impact on the next generation of their family or a charitable cause close to their heart.
Whatever that goal is, it’s important to define it. To state clearly what it is you hope to accomplish. Only then can you build a plan around how you will get from where you are, or your present reality, to where you want to be, the goal to be achieved.
As I discussed previously, financial planning is like a GPS for your financial journey ahead. But before you can truly begin down that road, you must have some end in mind.
One of the worst parts about the days I show up at the grocery store, having completely forgotten the reason that I’m there in the first place, is the days when my wife isn’t able to text back quickly (we do have two small kids after all!). It’s during this time that I usually roam the aisles trying to remember what it was we talked about earlier that morning, what the one important item I needed to get to accomplish my goal. Like any sane human being after a long day, this naturally leads to a basket full of other great and useful items but rarely the particular item I came there to get. Finally, my phone buzzes. “Ah, of course!” I say to myself before adding the key item to the stock of other less important ones in my basket now and heading on my way.
Clearly, a little bit of extra groceries along with the telling the look I get from my wife when I come home with some extra bags in hand isn’t the worst thing in life. However, when it comes to your financial journey, unclear or undefined goals can leave you spending time doing things that aren’t important to you or using your resources for things that are practical yet not really achieving the goals you desire.
Simply put, articulating clear, specific, and concrete goals can help you make the most of your limited time and available resources for the things that are most important to you.
In a future article, we’ll take a look at a few different ways a financial planner might help you define and articulate your goals.
Oh, and the next time you see me in the grocery store you’ll be glad to know it’ll be with a clear and focused mission. Our family has committed to a shared grocery list on our phones where we document what’s needed in a clear, specific, and concrete way so I never have to step into the store aimlessly again. Now, I just need to find a good excuse for adding to my basket that pint of ice cream all the way on the other side of the store!