How to Set Personal Money Goals So You Can Live Your Best Life Now
Why Goals Fail
Goals can be a finicky thing. You spend a lot of time crafting a very grown-up-sounding goal, only to have it slip through your fingers. According to a Motley Fool survey, 66% of American adults make financial New Year’s Resolutions goals. And according to that same survey, Gen Zers and Millennials are more likely than their Gen X and Boomer counterparts to set financial goals.
But sadly, most of us don't actually follow through on those resolutions around those goals. According to the Society of Personality and Social Psychology, 91% of new year's resolutions fall flat.
And there's a reason for this. It's not that you haven't been specific enough with your goals. It's not that you haven't been disciplined enough or anything like that. It's generally because when you choose a money goal, you are choosing them based on what somebody else told you, you should do instead of what you want to do for yourself. Instead? As a financial therapist, I always recommend to my clients that they set financial goals in alignment with their unique needs and values.
Personal Financial Goals Examples
Let’s start with personal money goals that usually fall flat. These personal finance goals are examples of what so many people choose off of a random internet list because they “should.”
Personal finance goals like:
Setting up a retirement account
Saving for a rainy day
Paying off student loans
Listen to personal finance podcasts
Save up for a home
Improving a credit score
Find a financial planner
Find or start a side hustle
Get life insurance
Pay off a car
Read finance books
Cut non-necessary spending
Negotiate a raise or land for a higher-paying job
Creating a will and trust
Look, there’s nothing inherently wrong with any of the above goals. But do you see how they are pretty bland? These goals are missing a crucial component (and no, I’m not talking about SMART-ifying them): they are missing personalization. They need to include the why behind them. And to get to the why, to make money goals so you can live your best life, you need to identify the values that meeting a financial goal would meet.
Making Money Goals That Stick: An Exercise
To make money goals that actually stick, you need to identify which money values your goals are aligned with. I want you to think, “What are my values?” I wrote a piece for Self magazine about this exact thing. In that piece, I shared an exercise adapted from my book, The Financial Anxiety Solution, that will help make sure that when you set financial goals, they're actually in alignment with your values.
On a piece of paper or Word doc, make two columns. On one column. I want you to write down all the things that really matter to you in terms of your values. Some questions to help elicit your top values, ask yourself, “What are the qualities that matter in my relationships? What are the things that excite me about my work? What aspects nurture my personal growth? What are the traits of my neighborhood and community make me smile?” Jot them down, and without judgment, curate a list of your top 3-5 values that matter in your life. Below, I’ve created a short list of values to get you started.
Money Values Examples
Kindness
Knowledge
Learning
Mastery
Novelty
Optimism
Predictability
Safety
Security
Serenity
Simplicity
Sustainability
Tolerance
Uniqueness
Autonomy
Boldness
Community
Connectedness
Curiosity
Depth
Ease
Fortitude
Grace
Honesty
Hope
Independence
Joy
Justice
Annual Goal Setting
Then, on the other column, write down all of the financial goals you want to achieve in the next 12 months. Get creative, let your pen or keyboard flow freely, and create a brainstorm of financial goals. This is the great thing about goal setting: I’m not a believer that January 1 is a magical date to set goals: goals can be set at any time for any reason. I set most of my personal goals on my birthday, and my business goals toward the start of the calendar year, but that’s just what works for me!
Now that we have two personalized lists: a list of values, and a list of money goals. It’s time to move into curating and creating truly values-based financial goals.
Values-Based Annual Money Goals
To set values-based annual money goals that stick, look at all the financial goals you brainstormed. For each goal listed, as yourself, “ Is this goal in alignment with my core values?" If the answer is “No,” you must scratch or modify that goal.
For example, if someone wrote “Stop buying kombucha to save money” as a financial goal, and their values were “serenity, ease, and connectedness.” Having a mid-afternoon kombucha could be in alignment with their values. Instead of stopping buying kombucha entirely, they could set a values-based goal of “Instead of buying a $7 kombucha from a cafe 3-4 times per week, I’ll buy a large bottle of kombucha for $8 with my weekly grocery run. I’ll still be able to enjoy a glass of mid-afternoon serenity, ease, and connectedness while saving money.”
Another example of creating a values-based money goal could be the person who wants to increase their emergency savings account. In their values column, they wrote down “safety, autonomy, and simplicity.” To make their emergency savings goal specific and aligned to their needs, they could generate a goal like, “Having two months of expenses in an emergency fund would help me feel safer and have more autonomy. I already have $1,800 saved, and I need $6,000 to have two months of expenses available. To keep it simple, I’ll create an auto transfer that moves $175 from my checking to my savings account on the 1st and 15th of every month, so I don’t have to worry about manually moving money around. By the end of 12 months, I’ll have automatically saved $4,200, bringing me to the $6,000 goal.”
Life Your Best Life Now
Financial goals don’t have to be tedious or punitive. When you set values-based money goals, you give yourself permission to enjoy your life now, and set financial goals that allow you to enjoy your life in the future, too. To recap, when you set goals based on someone else’s rules, there’s a good chance you won’t meet them. Instead, figure out what matters to you, and set money goals in alignment with your values.
If you want to help your organization or community start thinking about financial goals in a meaningful and values-based way, I can help! As a shame-free financial therapist and speaker, I provide keynotes, presentations, and workshops tailored to your unique needs. Reach out and let’s talk about how I can support your organization’s financial wellness needs.