2023 – the year of setting better goals
It’s that time of year: most of you set a goal you want to achieve in the next 12 months. However, a few weeks later you may have already abandoned that goal. It may be just too far out of your reach right now in terms of your current abilities. It may require more time or more money than you can afford to give right now. People are often overly optimistic in terms of how much time or resources they must put towards something and/or how much time or resources they have available. This is called the planning fallacy.
The worst part is that you will often feel like a failure and beat yourself up for not achieving your goal. I know I’ve done this many times in my life. I want to offer you a better way forward. One where you can achieve more and beat yourself up less.
To make a goal realistic you need to know how much it will cost you in terms of time and/or money. Doing some research beforehand and speaking to people who have achieved what you want to achieve will help. Once you’ve done that, I would suggest that you overestimate how much it will cost in terms of time and/or money (multiply your best estimate by 1.5) and underestimate how much time/money you have (divide your best estimate by 1.5). If these numbers are in proximity, then you likely have the available resources to work towards the goal.
If there is a substantial gap between how much something will cost and how much you have available, there are a few levers you can pull to close this gap. Chief amongst them is the time period in which you want to achieve this. People often impose tight time goals on themselves because it’s the norm. “My family member/friend/colleague was able to do X in Y time, there’s no reason why I shouldn’t be able to do the same”, you may say to yourself. The truth is: you are a case of one. Your life is unique. You have your own strengths, weaknesses, limitations and resources. These may differ substantially from the people you are comparing yourself to. You have your own path to walk.
I have CA(SA) colleagues who cruised through their studies and board exams in the minimum time of 6 years. I know people who took 10 years to complete their studies but passed their board exams first time. There are those who finished their studies in 4 years and then had to rewrite the second board exam 4 times before they passed. I took 6 years to finish my studies and passed my boards first time. And everything in between! We all got there, just in different amounts of time for different reasons.
Aiming too high may also have derailed you in the past. Choosing a goal that is too far out of your reach will most likely lead to failure. Conversely, choosing something that is too easily achievable and that is too far away from what we want to ultimately achieve, may lead you to ask, “What’s the point?” and have you give up. I would suggest that you choose something that is just a little bit outside of your current capabilities. Something that you will need to reach or stretch for, but not so far that you’ll fall on your face. This is a trial-and-error process. Importantly, if you continue to learn from it, it will never be a failure. Readjust your sights a bit closer to you and go again. Adapt your approach, make small refinements as you learn what works and what doesn’t.
When I was working as a financial planner, I would work out how much my clients would need to contribute towards their investments to accrue enough capital to generate the income they would need to live their desired lifestyle in future. This number was often much higher than what the client was already contributing. You could see the self-doubt and disappoint in the clients’ eyes when we had this conversation. Thankfully this is not an all or nothing.
Climbing Everest or eating an elephant is achieved by taking one small step or one small bite at a time. Many goals are cumulative. Giving more over time will lead to improvement. The consistency is the most important thing. Every little bit counts: It is not all or nothing.
Start small and get it done week after week, month after month and year after year. Every year put a little bit more towards it. You will be amazed what you will be able to achieve.
Here’s to 2023- The year of setting better goals.
Written by Brendan Dunn for Honest Money Podcast