This article explains the benefits of setting personal finance goals and why it’s an important step in taking control of your personal finances. Chances are that it’ll contain things you’ve heard before, some ideas will ring true, and you’ll likely nod agreeably by the time you reach the end of the article.
But there are some rabble-rousers out there who have taken a stance against goal setting. Rather than assume they’re all morons (they’re not, Stephen Fry is one of them), we’ll explore both stances and you can agree with whom you like (as long as it’s us).
What’s wrong with goals?
“By focusing too much on the future one can lose touch with the present”.
“Opportunities go by unexplored as your present self is disconnected from what’s around you”.
“Not all who wander are lost” 
“Can’t I just be?”
These are the general themes when it comes to arguing against goal setting as a tool for personal development. Some of these themes could be valid, but never in the context of a personal finance discussion.
It is understandable that someone who might be exploring a new vocation or talent would want to see where ‘things go’, and not necessarily need to set goals. Some people want to see what opportunities present themselves and not commit to a desired outcome. That is all fine, but like we said – never in the case of a personal finance discussion. Not ever. Infinity time from now.
What’s right with goals, and why?
Where personal finance is considered, goals are there to moderate behaviour. If you’ve found something that intrigues you, then some creative time spent ‘wandering’ would likely do you good. Meandering through experiences is a way to discover what you want to become, not generally how you plan on getting there.
Personal finance is not a creative journey where you figure out what you want to become or do with your life. While figuring that out ultimately gives meaning and purpose to all that you do and how you in turn relate to money, rather be in control of your money from the start. You’ll have a lot more time and energy to figure out the rest of your life. See more about this in our post on Your Money or Your Life, quite thought provoking!
Once you know what you want or even just have a better sense of it, the discussion is no longer about a personal or creative journey; now you want results and progress.
If you’re after outcomes that allow you to be job-free in ten years’ time or save for a holiday, chances are that you’ve found a ‘thing’ – you don’t want to wander.
Oh yeah? Well goals still suck and here’s why!
“By setting aspirational goals, you set yourself up for failure as hardly anybody meets all their goals – who wants to continually feel like a failure?”
“What happens after the first goal, and the second, and so on? There’s always another goal in this never-ending contest to be better, reach further or get more”.
There are good goals, inappropriate goals and bad goals. We suggest that if you’re experiencing the above, chances are that your personal finance goals need some attention. Left to their own devices, some people will formulate goals that sabotage their efforts and do more harm than good. How exactly to set meaningful personal finance goals and goals that allow your actions to have intention is discussed in our next article, but we acknowledge that not all goals are equal; understand that all that is desirable is not necessarily goal-worthy.
A good goalshould motivate you. It will allow your actions to have intention and pull you through the tribulations of learning and push you towards your desired accomplishments.
A better goalis a goal written down. Not in your head, but on a piece of paper – pinned up where you can see it – often! A visual goal is a constant reminder, or external representation of what matters to you; think of it as a timeline for achievement.
The best goalserves to help you to self-regulate your behaviour. Self-regulation is one of the most critical skills for progress when it comes to personal financial growth. When people commit to achieving their goals, they are likely to self-regulate their behaviour towards this achievement, doing away with the self-defeating human mistakes that people make (something we’ll touch on in the months to come).
Not to be ignored
There is a growing set of research that shows that “mastery” or learning goals have as many, if not more, positive effects on performance and internal motivation as performance goals, which would be your typical, “save for my holiday”, “save to send my daughter to university” and “Buy a Bat-Tank”.
What better field or topic to achieve an element of mastery than personal finance? After all, the mastery of money makes performance goals (Bat Tank) so much easier to reach. The rewards are both intangible AND tangible.
 All that is gold does not glitter, written by J. R. R. Tolkien for The Lord of the Rings.