Setting goals is key to being successful. Especially when it comes to your finances. Unfortunately, many people make the same mistakes, over and over again, when setting goals. This makes it hard or even impossible to achieve those goals.
In this article, I’ll walk you through five common mistakes when setting great financial goals. And, more importantly, how you can avoid them.
Avoiding these mistakes will increase your chances of actually achieving your financial goals.
Mistake 1: You’re not really sure why the goal is important
It’s so important to make sure that your goal connects with a purpose that really matters to you. If you don’t feel a personal connection to your goal, it will become a chore. A burden. You will almost certainly abandon the goal.
Really feeling the Why of the goal will keep you motivated during challenging moments. Setting a goal that connects deeply with your “why” often means digging into what really matters to you.
You could use the “5 Whys” technique to get to the core motivation. This process reveals if the goal has a strong emotional connection or if it’s rooted in external pressures.
Mistake 2: Your goal is too ambitious
It’s only natural that you want to dream big. But it’s also important to be realistic. If your goal is too ambitious, it can actually backfire. Sometimes the goal feels so far away that you don’t even dare to start, and that’s a shame! Big dreams can be very motivating, as long as you approach them in the right way.
Your goal should be ambitious, yet achievable at the same time. How to do just that? By taking that BHAG and breaking it down into doable steps. Breaking them down into smaller, achievable tasks makes progress seem within reach and keeps you motivated.
Mistake 3: You have set a vague goal
Another common mistake is setting a vague goal. Goals like “I want to save more” or “I want to double my income” are way too vague. They lack clarity and targets. They are not SMART. Without a specific target, it’s tough to stay motivated or measure success.
If you don’t have a clear target, it’s hard to get started. Why does this happen? Many people know they want to change something, but don’t know how to do it. Or they’re afraid to commit to exactly what they want, in case it doesn’t work out.
SMART goals can provide a way forward. Clear, measurable goals give you a roadmap and make progress easier to track. And they give you a perfect reason to celebrate your successes! Treat yourself to something special for every little achievement, no matter how small.
Mistake 4: You did not write down your goal
You had a great goal. You were absolutely determined to make it happen. And maybe you even started. But then life happens and you start to do other things, Things not aligned to your goal. My guess is, you did not write down your goal.
When you don’t write down your goal, it’s more likely to remain a fleeting thought rather than a solid plan. Your daily responsibilities and distractions can easily push the goal out of focus. Also without writing it down, there’s no “evidence” of your intention, which makes it so easy to ignore or procrastinate.
My big tip here is (drum roll): write it down! Writing down your goal has a surprisingly powerful effect on commitment, clarity, and accountability. It’s a simple yet powerful step that helps to make your goal a reality.
Mistake 5: You have no timeline
Having a goal is great. But, when will you reach it? Goals without a timeline tend to lose focus and direction. Life gets in the way. You have been there before, probably?! Without a timeline, a goal is just a someday idea. This makes it hard to keep going because there’s no reason to hurry.
A timeline gives structure and urgency to a goal. Deadlines make you more accountable. You can check your progress and see what you need to do. This also boosts motivation and helps you celebrate small wins.
It’s the same logic that applies to investing. Before you dive into investing, it’s crucial to know your timeline. Read more about that topic in this article.
Remember, really do celebrate! I already mentioned it before. And will keep doing, as it is one of the most powerful motivators and fun as well!
In summary
Setting great financial goals is important, but it’s easy to make mistakes that stop you from making progress. Avoid these common mistakes: vague goals, no timeline, and not knowing your “why.” Make sure your goals are concrete and achievable, and work towards your end goal in small steps. This will keep you motivated and help you see progress step by step.
Achieving your goals is about more than reaching an endpoint. It’s about building habits, staying focused, and learning from each step. And please don’t forget to have fun and celebrate along the way.
Hope this article helps you on your dorky way to reach your (financial) goals.
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