The Importance of setting goals
“Would you tell me, please, which way I ought to go from here?
“That depends a good deal on where you want to get to.”
“I don’t much care where –”
“Then it doesn’t matter which way you go.”
Alice and the Cheshire Cat in Alice’s Adventures in Wonderland
In a short blink, we’re nearly one month into the New Year. Although this seems like a pre-New Year’s topic, I’ve continued to think a lot about the importance of goal setting. Sometimes, goals can be arbitrary and outcome oriented. But approached in the right way, goals are essential.
While a goal is an end result, knowing the end result allows for the creation of the actions necessary to reach the goal. When we know where we want to go, we can develop a map for how to arrive. What are the steps we have to take in order to accomplish the goals we set out? Equally important, what actions must we eliminate to reach our goals?
Once we have created a map for reaching our goals, we can compare our actions or inactions to those steps and the end goal. By setting goals, making a plan, and tracking our progress, we have a compass to guide us. Without the initial goal, we have no direction to follow – or to judge our actions against.
When we first decided we wanted to pay off all our debt, we set that as the goal. We aimed to pay it off in three years and made a plan to do that. If we averaged paying $2,500 a month towards our debt, we would accomplish that particular goal. To have $2,500 a month to put towards debt, we had to make some changes to how we spent our money. We had to make a spending plan. Every time we deviated from the spending plan, we were taking an action that went against the goal. Every time we did that, we felt dissonance. It didn’t feel good. The power in having the goal and the plan, and a clear view of what would affect the plan, helped us to reach the goal. We ended up reaching the goal in two years, because aside from seeing what would go against the plan, we could see what would enhance the plan.
As you think about your financial goals, think clearly about how to achieve them and what gets in your way of achieving them. Often having a spending plan is the first step. To reach your financial goals, how do you need to use your resources? Do you need to spend your money in a different way? Is there an option for additional income? What happens to the goal and the plan if you deviate from it?
The goal is important insofar as it allows you to create the map. The map for achieving the goal is where you can create traction and use as a compass to know you’re going in the right direction or discover if you’re veering off path.