The Power of Goal Setting in Your Financial Plan: 97% of People Skip This Success Secret
“A goal without a plan is just a wish.”
What if I told you that simply writing down your goals makes you 42% more likely to achieve them?
That's what research from Dominican University of California discovered. Yet here's the kicker: only 3% of people actually write down their goals.
Think about that for a moment. We're talking about a simple action that nearly doubles your chances of success, but 97% of people skip it entirely.
As a Certified Financial Planner™ working with pre-retirees and small business owners, I see this gap constantly. People come to me with vague notions like "I want to retire comfortably" or "I need to save more." But when I ask for specifics such as when do you want to retire, what does "comfortable" look like, what are you saving for, they realize their goals are pretty fuzzy.
That's where the real power of goal setting comes in. Because the truth is goals aren't just nice-to-have fluff. They're the foundation and true purpose of every successful financial plan.
The Investment Connection You Haven't Considered
Did you know?!
The average return of the S&P 500 index is consistently better than the average investor investing in that same index over the same time period. Why? Because the average investor tries to time the market.
According to DALBAR, in 2024, the S&P 500 returned 25.05%, while the average equity investor earned only 16.54%. That's an 8.51% gap in performance. Over longer periods, this gap becomes even more dramatic.
This is where goals become your secret weapon. When you have clearly defined goals with specific time horizons, you're less likely to make emotional decisions with your investments. You know exactly why you're invested and for how long.
As Morgan Housel writes in The Psychology of Money: "Planning is important, but the most important part of every plan is to plan on the plan not going according to plan."
Action Step: Open separate accounts dedicated to specific goals. Most custodians allow you to change the name of the account so you can actually name it after your goal. This simple yet powerful step helps you stay on track.
Ask Yourself the Right Questions
Most people think they know what they want, but when pressed for specifics, they realize their goals are pretty vague. Try asking yourself these:
What would you do if money weren't a constraint?
What does a typical day look like in your ideal life?
What would you regret not doing or experiencing?
What legacy do you want to leave?
If you're a business owner or nearing retirement, your goals need to go deeper than "save for retirement." You should be asking:
When do I want to step back from day-to-day operations?
Who will run the business when I'm gone?
What kind of legacy do I want to leave—both professionally and personally?
These aren't just goals. They're exit strategies. And defining them now changes how you spend, save, and plan starting today.
Values Alignment: The Secret Sauce
There are times that I can look at someone's spending over the years and identify their true values, even if those aren't the values they claim to have.
Your money follows your priorities, whether you realize it or not.
That's why aligning your goals with your core values is so critical. When your goals reflect what you truly care about, whether that's philanthropy, education, small business ownership, travel, or cultural experiences, you're much more likely to follow through.
Goals that align with your values don't feel like sacrifices. They feel like investments in the life you actually want to live.
The Science Behind Writing It Down
As mentioned at the beginning, research by Dr. Gail Matthews from Dominican University of California found that people who physically wrote down their goals achieved significantly more than those who just thought about what they wanted to accomplish.
There's something powerful about the physical act of writing. It creates ownership and accountability in a way that just thinking about goals never can. This is why I created the Goals & Priorities section of my financial plan organizer. It gives you a place to write down and track your goals. It also helps you see the connection between your goals and your values.
Bonus Tip: Including pictures, either a photo or drawing, greatly enhances your emotional connection to your goal. Consider taking time to sketch some pictures of your goals and put them in a place you can see them daily. This is much more powerful than checking your account balances often.
Double Secret Bonus Tip: It doesn’t have to be a picture or a drawing. I wear a bracelet with a fish hook on it to serve as a simple reminder of what freedom looked like to me growing up. I grew up fishing every weekend with my family off of the Jersey shore. Those important memories to me and this bracelet keeps me focused on bringing that lifestyle back. I want my kids to feel that same sense of freedom one day. Mementos like this can be powerful. They ground you in your “why” and give you something real to hold onto when the work gets hard.
The Balance: Discipline and Flexibility
Discipline is absolutely the main ingredient in accomplishing your goals. But life changes, and sometimes your goals need to change too.
Don't be afraid to make your goals flexible. Maybe in your twenties you set a goal to retire early and live in a van traveling the country. But by your thirties, you've gotten married and discovered a love for international travel. That thirst for adventure doesn't have to die, it just needs to evolve.
Change is good. The key is making intentional changes based on growth and new understanding, not giving up when things get challenging.
Start Your Goal-Setting Journey
If you're ready to turn your wishes into achievable goals, I've created the Financial Plan Organizer to help you get started. It begins with your goals, not your investments, because everything else should flow from what matters most to you.
I also have a Master Goals List, which is a comprehensive tool to help you think through all the different areas where you might want to set goals. Request this along with your free organizer.
“The journey of a thousand miles begins with a single step”
Focus on getting just 1% better each day, and by the end of the year, you'll be 37 times better than when you started. Investments aren’t the only thing that can compound.
Ready to get started? Request your free Financial Plan Organizer and begin turning your dreams into actionable goals.
Questions or need help?
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Integritas Financial is lead by Ryan Kaysen, a certified financial planner™ based in Charlotte, NC.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
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