Setting good financial goals and why your systems can make or break them

by | Jan 24, 2023 | Managing Your Finances, AMP, Police Association, Ryman Healthcare

Have you ever set a goal only to see another year float by without being any better off than how you started?

If you’re one of the millions of people who set a New Year’s goal only to abandon it before January has even come to an end, there’s a good reason for this – and it’s got less to do with your goal, your capability to achieve it, or your motivation than you might think.

Often, most of the attention is given to the goal – the ‘what’ you’re wanting to achieve – rather than the ‘how’ of achieving that goal.

And that’s where the cracks can begin to show.

Because no matter how SMART or relevant your goal may be, how achievable or motivating, without the right systems in place, you’re not setting yourself up for success.

So, what makes the systems so important?

In his book, Atomic Habits, James Clear wrote that for years he set goals for himself. And while he achieved some of those goals, he failed at others. He realised that his results actually “had very little to do with the goals I set and nearly everything to do with the systems I followed.”

He goes on to say that even without a specific goal, having the right systems is what matters when you want to see results.

But this doesn’t mean goals aren’t an important part of the process. Goals are crucial for setting direction, while the systems are there to help you make progress. 

When it comes to your finances, having the right systems in place – like automated payments going into a savings account, or your mortgage structured in a way that makes it easy to pay it off faster – will make it easier for you to start seeing results and reach your financial goals.

So how do systems help?

The reason systems are so useful is that they make it easier for you to create (and stick to) the habits that will help you achieve your goal and remove the obstacles and distractions that might derail you.

The specific systems you set up will depend on the goal you’re trying to achieve but may include:

  • Creating a detailed plan that not only outlines your goal but chunks it down into all the tasks that need to happen for that plan to be executed.

For example, if you were wanting to buy a house, you’d want to know what kind of house you’re wanting to buy, how much it will cost and how much your deposit will need to be. You’ll want to look at your KiwiSaver and other savings to see what your starting point is and therefore how much more money you’ll need to save. And then determine what a reasonable timeframe will be to achieve that and how to protect your money against any volatility between now and when you’ll want to use it.

  • Automation so that instead of relying on your memory or motivation to put money aside, a set amount goes out each payday. You don’t have to think about it, you’re not relying on your willpower, but it gets done.

You could also set up direct debits so your bills get paid on time and you’re less likely to be stuck with late payment fees. Setting reminders on your phone when your mobile, broadband or energy comes off their fixed-term plans means you can check whether you can save money by switching providers.

  • Removal of the temptations that make it easy to veer off track – like marketing emails that incite a serious case of FOMO, or credit cards that make spending (even when you don’t have the money) mindless.
  • Accountability by telling your friends or getting the help of a professional so you have someone other than yourself to answer to – surround yourself with the people who will support you in your goals.
  • Setting a regular time to measure and review your progress to see how you’re tracking against the milestones you’ve set yourself and whether you need to adjust anything. What might you need to adjust to help you see you achieve your goal, or is there an opportunity to up the ante?

Where to from here?

Goals are important for focusing your priorities and giving you something to work towards. Without a goal, the work you’re putting in might be aimless, and you won’t know whether you’re working to your full potential.

So, you still want to have a juicy goal to work towards.

But by setting up good systems, you’re not only increasing the likelihood that you’ll achieve your goals, you’re also setting up a foundation that you can continue to build on for future financial growth.

So, whether you’ve set a goal, or you’re in the middle of deciding what your goals for 2023 should be, take some time to set the systems in place that will make them easier to achieve.

Need help? An financial coach can help you reach your financial potential by helping you to set the right goals, get the right systems in place, and support you throughout. Book a 90-minute consultation to talk through your options and discover which programme will help you achieve your financial dreams. (Fees apply).

Disclaimer: This blog post is for informational purposes only and does not constitute individual financial advice. If you’re interested in receiving personalised financial advice, you can book a consultation with an coach. Costs apply.


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