When The Carrot And Stick Aren’t Enough – Try This!

What is your financial “carrot”?  We are taught to set S.M.A.R.T goals in life. A SMART goal is specific, measurable, attainable, realistic, and tangible.  Traditional, old school financial planning adheres to quantifiable goals with rates of return, risk tolerance, and time frame.  It is just a place to start.

This template for setting and achieving your SMART goal appeals to the rational side of our brains and is solely linear.  It may feel rigid and inflexible, methodical, and analytical.  This linear way of thinking about your future financial situation creates stress when obstacles happen (COVID, tax law changes, market conditions or personal life quakes). It thwarts your ability to tap into the character assets of resourcefulness, creativity, resiliency, bravery, and even humor.

Many times, it packs with it the stick of financial behavior and beliefs. People don’t want to go see a financial advisor because they may feel shamed or inadequate.  In my twenty five years of working with clients – I have heard it all.   “I should be better with money. I should save more. I should spend less. My future should look like what culture or Social media posts define as happiness or success”.  “Should do” puts you in a position of pressure and paralysis – keeping you from living your life authentically and optimizing the financial resources you have.  More money only exacerbates the guilt of what you “should” do with it.  While the carrot and the stick are not inherently bad, you may be missing out.

There is a better approach to the conscious goal-setting process.

At Wealth By Design, we walk alongside you to reconnect with your core values and base your financial goals on what is truly important in creating a life well-lived.  It is a combination of right and left brain thinking when it comes to money and achievable goal setting.

George Kinder, CFP® one of the fathers of ‘Financial Life Planning’ shares that “each of us carries within a secret yearning – a yearning that, as time and life march on, often becomes a secret sorrow.  That yearning will be different for each of us as it is the most deeply longed-for expression of self.  Only to the degree that we, each of us, can bring forth our own heart’s core, will our lives feel fulfilled, truly worth-while”.

In their book ‘Life Matters’, authors Roger and Rebecca Merill remind us that our time and our money are important resources, and both are “languages of value.”  “They are highly interrelated, and the way we spend both communicates what’s important in our lives.”

Daniel Pink’s book ‘Drive’ expounds on self-determination theory.  He proposes that humans have an innate drive to be autonomous, self-determined and connected to one another, and that when that drive is liberated, we achieve more and live fuller, richer lives.

The intuitive, holistic, multi-dimensional side of your brain is a powerful resource when it comes to money. An emotional view of the SMART acronym would incorporate:

Significance – What brings joy to your life journey and financial decisions as you move forward?

Meaningfulness – Don’t look at the world but align where you are headed with what resonates with your soul.

Attractiveness– What image draws you to your unique version of a life well lived? This will help guide daily decisions.

Rewarding – We consciously or unconsciously weigh the cost and benefit of our desired future.  An awareness and appraisal of this inner conflict will bring clarity.  Is the reward worth the risk to you?

Timely – Some goals are dictated by deadlines and others need to free of them.  Much of the current narrative around goal setting is defined by our culture – not our values.  Think of the “retire by” dates.  Open-ended goals encourage us to stretch our imaginations and embrace the possibilities. Culture’s retirement time frame does not need to be a limiting factor for your goals.

Using both sides of your brain in financial/life successful goal setting will move you toward “choose to” thinking which puts you in a position of power and potential.  The team at Wealth by Design will walk alongside you to create the now and facilitate the future using whole minded thinking and strategic financial life planning.

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