I got up at 5 am this morning to start a running routine (yet again) and by lap three at the local track, I tried to remember why I was doing this. The usual stuff came to mind: I wanted to lose 5 pounds and to be able to run a 10 miler in the fall, etc. To get to these goals, I should be running 4 times a week, 3 to 4 miles for the first month, 5 to 6 for the second, and so on.
Lap 4 did not go so well either. I felt tired and dispirited as the numbers multiplied through my head, like those scary bucket-bearing brooms in Disney’s Fantasia. It occurred to me that perhaps I was working toward the wrong goals. I decided instead to run for the simple reason that I wanted to live the best life I was capable of. Physical fitness is, for me, an important element of that “best life.” Changing my goal did not get me running faster and farther this morning, but it did transform my run into something I enjoyed.
Setting goals is a fundamental part of the financial planning process, and given the subject matter – money – it inevitably involves numbers. “Eliminate $1500 from monthly expenses.” “Build a retirement nest egg of $1 million by age 68.” “Put 10 percent of gross salary into a 401(k). “ Planners like formulating these kinds of goals for their clients, because they are easily measured and monitored. As the saying goes, if you don’t know where you are going, any path will get you there … including the path that does not involve any financial planning at all.
As a CFP® practitioner myself, I happen to believe that financial planning is a good thing, and that goal setting is a fundamental part of this process. I am also a businesswoman and so understand the rationale of the S.M.A.R.T. method of setting goals: namely making goals Specific, Measurable, Actionable, Realistic, and Time-Bound. But given the difficulty that so many women have around personal financial management, I have come to the conclusion that perhaps we need to modify the goal setting process, to make it gentler, more intuitive and less numeric, and thus more empowering for women.
Consider instead an alternative S.M.A.R.T. method for goal setting:
S = Should-less
M = Me-full
A = Actualizing
R = Real
T = Timeless
Specifying goals in this way puts the emphasis on the fullness of your life in the continual present and on what is true for you. When applied to personal finance goals, you begin to think of ways that money can be used to live your best life, not because others, armed with rulers and stop watches, tell you this is what you should be doing, but because you want to. You save, you invest, you get the necessary documents drawn up for your estate, you fund your child’s education account because it gives you a sense of purpose and liberating control, and expresses your care and love for your family.
Having $1 million in your 401(k), while measurable, lacks meaning for many of us. Yes, you and your financial planner will know if you’ve attained it, but what, in fact, have you really attained? The things in life that really count – peace of mind, love, connection, hope – cannot in fact be counted. They are immeasurable.
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