3 Steps to Discovering Your True Financial Goals

What are your main financial goals?

Most of us have an idea of ​​our answer to this question. But have you ever thought about how stable or consistent your answers are? Or have you noticed that your goals can change over time or context? “What are your goals?” might be one of those questions that seems easy but turns out to be surprisingly difficult.

If your goals are difficult to define or seem to drift, you’re not alone.

Research shows that even when thinking about important goals, people tend to respond with whatever comes to mind, which doesn’t always reflect their true long-term goals. For example, let’s say your social media feed has recently been flooded with photos of your friends’ incredible vacations. After watching yet another movie-worthy video of a friend traveling in northern Italy, you decide to put down your phone and write down your financial goals.

At this point, when you think about your major long-term financial goals, the top priority that comes to mind is “travel more and take exciting vacations,” even though you may not have considered travel to be that important before.

This doesn’t mean that traveling isn’t a priority for you. And it doesn’t mean that you aren’t doing your best to think seriously about your financial goals. It just means that you’re human, and when faced with such a big and demanding question, our minds tend to take shortcuts, like the availability heuristic that equates “easy to remember” with “deserves more attention.”

In situations like this, it can be helpful to implement ready-made processes that help us become less alienated from ourselves and better understand our deeper motivations, rather than focusing on the memories that come to mind.

3 Key Steps to Better Goals

We used our research to develop a three-step process that can help investors identify their financial goals more strategically. This process requires investors to slow down and look at the topic holistically.

In practice, this provides the space and structure that people benefit from when they think deeply about what they want to do with their hard-earned resources in the long term. Here’s what the steps look like.

Step 1: Slow down

First, grab a notepad and write down your top three investing goals.

• Most important goal
• Second most important goal
• Third most important goal

Think of this as a brainstorming session, which can be helpful in getting things moving. But remember that this is just the first step, and everything written here should be considered “pencil-written.”

Step 2: Use a process

Next, set aside the notepad and review a list of common investment goals (see below). Consider each alternative and check off the goals on the list that are important to you. As you go, cross off the goals that don’t resonate with you.

There is nothing magical about this list. Its advantage is that it gives people a different perspective on what might motivate them and, moreover, the opportunity to evaluate options rather than having to generate ideas. And evaluate them at the same time. Doing two things at once is difficult (imagine trying to drive and read a text message simultaneously).

Step 3: Think carefully

Now, taking into account both your initial list from the notebook and the annotated list of common goals, think about your top three investment goals. Write them down on a new sheet of paper. Has your list of top goals changed since Step 1? If so, how?

A simple but effective approach: create a master list

If your goals have changed, you’re not alone. In our research, we found that about 70% of people changed at least one of their top three goals after following this simple three-step process.

After reviewing the master checklist, some people who had initially thought of their goals in general, vague terms began to formulate more specific and vivid ideas. The master checklist also helped many respondents move from initially focusing solely on financial outcomes (which tend to be impersonal and potentially unmotivating) to reframing their goals in terms of their emotional and personal values. This process helped them better understand their goals. Why (not only their What).

To conclude

If there’s one thing you should take away from this article, it would be this: accurately identifying your financial goals isn’t easy, but there are proven processes we can use to help us break down this important but deceptively simple decision.

So the next time you are faced with the big, scary question of financial planning—“What are your overall long-term financial goals over 30 years?”—try using the steps above to help you make a decision and break the problem down into manageable steps. This can help ensure you find your real goals, not just the things that come to mind. This helps investors become less of a stranger to themselves and identify their Why as they move towards where they want to go.