Setting financial goals is relatively easy compared to the tedious task of monitoring progress towards those goals. That’s because monitoring takes ongoing commitment. You must try to surmount the inevitable roadblocks that arise while progressing towards your goals.
Further, there is no accountability around setting goals, whereas monitoring goals is all about accountability. You cannot fail when you set a goal, but monitoring goals invites the possibility of failure.
Financial goals bring additional challenges that make them harder to achieve than many other types of goals. A recent meta-analysis by the American Psychological Association of 138 studies comprising 19,951 participants found that goal setters “were less likely to monitor their progress toward goals related to finances.”
The unfortunate truth is this: Monitoring financial goals is hard, but if you want to achieve them, tracking your progress is a must.
Four Key Aspects for Success
The study mentioned above highlights four aspects of goal monitoring that can lead to success:
- You are more likely to monitor your goals if they are stated in quantifiable terms. (i.e. donate $30,000 to charity versus donate a good amount to charity) and this will also make them easier to monitor.
- The more often you monitor your progress, the greater the likelihood you will succeed.
- Reporting your goals publicly (keeping a spouse/partner, friend, etc. informed) increases the likelihood of achievement.
- Physically recording your progress was also identified as important.
Tools to Help Monitor Financial Goals
Tools are available to assist with financial goal-tracking, but most – including popular options such as Quicken and Mint -- are limited to tracking expenses and savings. These features are less likely to appeal to high net worth families and individuals. For those interested in self-monitoring financial goals, creativity will be required.
The few people we know who do a good job of tracking progress towards their goals have found success by keeping it simple and personal. For example, one client uses a small, spiral bound notebook to meticulously track his results. A few other clients are handy with a basic spreadsheet software like Excel and use it to keep themselves on track.
Due to the inherent challenges associated with monitoring financial goals and the lack of easily available aids to assist in the endeavor, it’s very difficult for most people to successfully do it on their own over the long term.
Where to Find Help
Your best opportunity to find assistance is by identifying an advisor like a life coach or certain types of financial advisors. Current advisors such as an accountant or insurance agent may be helpful but may not be a good long-term solution.
Members of the International Coaches Federation have earned the Master Certified Coach designation and are considered the gold standard in coaching. Their website has a nice search feature with filtering capabilities. You can access it here.
Some members of the Garrett Planning Network may be helpful as they are compensated by an hourly fee. This means there is alignment between your needs (setting and monitoring goals) and their compensation. I say “may be helpful” because an increasing number of their members are switching to a compensation method based on the amount of investments they manage, so they are incentivized to gather investment assets rather than to plan and monitor goals.
How We Monitor Client Goals
After much trial-and-error, we have developed a set of goal-monitoring best practices that our clients find very helpful. Helping clients set goals and achieve them through careful monitoring is at the heart of our work together, the guiding light for our client interactions.
Like most people, our clients are very busy. So, we provide them with a simple, easy-to- understand, at-a-glance graph of their goals and their current results versus those goals. We call this graph myWealthPath.
We have learned that reporting on multiple goals separately confuses clients, so we provide them with a single graph that encompasses all their goals. The focus of the conversation we have about their myWealthPath is dictated by how their current results compare to their goals: above the goal line (ahead on achieving the goal), on the line (on track), or below the goal line (behind).
To see a visual of myWealthPath with an accompanying brief video click here.
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