Three steps to uncovering your true financial goals

If your financial goals feel elusive or seem to drift, you’re not alone. Research suggests that even when considering important goals, people tend to answer with whatever is top-of-mind, which may not always reflect their true long-term goals. It can be helpful to implement ready-made processes that help us better understand our deeper motivations rather than fixate on top-of-mind recollections.

We’ve used our research to inform a three-step process that can help investors more strategically identify their financial goals. This process forces investors to slow down and consider the topic holistically. In practice, it provides the space and structure that people benefit from as they think deeply about what they want to do over the long term with their hard-earned resources.

Here’s what the steps look like.

Step 1

Slow down. First, take out a notepad and write down your top three investing goals. Think of this as a brainstorming session, which can be useful to get things rolling. But remember that it’s just the first step, and anything written here should be considered written in pencil.

Step 2

Use a process. Next, set the notepad aside and review an established list of common investing goals. Consider each alternative and mark off the goals on the list that are important to you. As you go along, cross out goals that don’t resonate with you. There’s nothing magical about this master list.

The benefit is that it gives people a different perspective on what they might be motivated by and, moreover, the opportunity to just evaluate options rather than having to generate ideas and evaluate them at the same time. Doing two things at the same time is hard (think about trying to drive and read a text message simultaneously).

Step 3

Think carefully. Now, taking both your initial list from the notepad and the marked-up list of common goals into consideration, think about your top three investing goals. Write them down on a new piece of paper. Has your list of top goals changed since Step 1? If so, how?

If your goals changed, you’re not alone. In our research, we found about 70 percent of people changed at least one of their top three goals after going through this simple three-step process.

After considering the master checklist, some people who initially thought of their goals in broad, vague terms began to formulate ideas that were more specific and vivid. The master list also helped many respondents shift from initial goals that focused solely on financial outcomes (which tend to be impersonal and potentially unmotivating) to reframe their goals in terms of their emotional and personal values. This process helped them better understand their “why” (not just their “what”).

Next time you are faced with the big, scary question of financial planning–“What are your overarching 30-year long-term financial goals?”–try using the steps above to aid your decision-making and break the problem down into manageable steps. It can help you make sure that you find your true goals and not just things that are top of mind. This helps investors better understand themselves and to identify their “why” as they move toward where they want to go.