Four Steps to Set Yourself Up for Financial Success

Making goals is easy. Achieving those goals is much harder. Adviser Kurt Wunderlich outlines four steps to setting yourself up for financial success.
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By Kurt Wunderlich, CFA

Making big, hairy, audacious goals is easy. Achieving those goals by yourself is much harder. Nearly everyone has had some experience with just how difficult successful personal or financial change can be, and especially sticking with it over time. For evidence, look no further than the infamous New Year’s resolution. A recent study concluded that only 8% of people end up keeping the well-intentioned promises they make to themselves each January. We’ve all seen it; gyms are packed and doughnut shops are empty for the first two or three weeks after the calendar turns, but that tide inevitably seems to reverse as momentum fades.

Kurt Wunderlich, CFP

Kurt Wunderlich, CFA

Sure, the start of a new year is a great time to reflect on achievements and celebrate the promise of a fresh beginning. For some, it signifies a potential shift in who they are. They use it to start living the life they desire: eating healthy, spending more time with family, or giving up a bad habit. But the terrible success rate that such resolutions appear to have might say something about what’s actually effective when it comes to goal-setting.

Let’s acknowledge that the hardest part of change is taking the first step. If your financial goals for this year and beyond need some attention, here are a few ways to get things in motion and stay on track, no matter what time of year you choose to start.

Step 1: Create your vision

A popular metaphor to describe the need for thorough planning and preparation is that you can't begin building a house until you have a solid foundation. Strong foundations are fundamental, but the first step is actually designing the blueprint. What will it look like? Where will your family gather together? What do you want the home to accomplish? These questions need answers before your contractor digs a hole and fills it with concrete. Now that you have a vision of your goal in mind, write it down, as written goals have a much higher chance of success. Be as specific as you can. Let’s say your goal involves retirement. At what age do you want to retire? How much do you expect to spend? Where does your retirement happen, and why is this the retirement you envision?

For example, pretend a couple decides to retire at age 55. They want to maintain a monthly spending budget of $10,000, all while retiring to Florida and purchasing an RV to travel the country to visit their children and grandkids. Once the vision is established, work backward to discern the steps you need to take to achieve your goal.

Step 2: Create the roadmap

Setting your vision without also developing and understanding your plan for how to get there is like starting the family road trip without a map, GPS, or skilled navigator. Usually these trips don’t end well (think of the movie “The Hangover”). Build your roadmap one intermediate goal at a time. What habits do you need to establish today to achieve success in the future?

For our RVing soon-to-be retirees, the roadmap likely involves understanding the cost of an RV, how much money to save and in which accounts, and a process for transitioning their roles at work to their successors. Because they are retiring prior to 59½, it’s imperative to review the savings they hold in taxable accounts and evaluate whether 72(t) distributions make sense for them in order to avoid early withdrawal penalties from their IRAs. On the non-financial side, they need to practice driving an RV and determine what amenities they want.

Step 3: Be flexible

Financial life planning is not a one-step process. Goals may stretch months or even years into the future. Goal planning and plan execution is a process. Obstacles are bound to crop up. The key to staying on track is making those issues the exception, not the rule. It’s okay if a quick stop at Shake Shack thwarted your keto diet or you fell short of your monthly savings goal. Take stock of what happened, examine what led to the break-in behavior, and introduce guardrails to reduce the chances of it happening again. Use whatever tricks you can to keep you in the envelope. I know of one person who goes back to bed and restarts her day if it is not going the way she wants.

Most goals have an arbitrary start date and end date. The key, though, is sticking with the process for the long term. Creating the perfect process that fails you is not the perfect process.

Our couple in question is laser-focused on retiring early to RV around the country to visit family, but over time additional goals did surface. Turns out they also want to celebrate their 30th wedding anniversary the way they had always planned: a three-week trip to the Maldives and India. Because this would require them to skip a few months of saving, it was time to revisit the retirement analysis to determine whether the change in plan was worth it or if it was better to stay the course. For them, the decision was easy; they would need to delay their retirement for six months to achieve both goals, and off they went.

Step 4: Reassess your goals

Life is not linear, and your plan shouldn’t be either. Whether it is on a quarterly, annual, or another timeframe, revisiting your goals is important. An unbiased third party weighing in can help settle any disputes or contribute ideas for how to improve your odds of success. Ask these questions: Does this goal still take priority over other things in our life? Is the timeframe still correct, or is there a different end date? Are we on track? If your goal becomes secondary to another or is scrapped altogether, review why it changed and the financial implications, if any, of that change.

Remember our RVing retirees? They had to reevaluate their goal of retiring at 55, and they chose to delay their early retirement six months because it allowed them to take a trip of a lifetime and still set aside plenty of time for traveling with the family.

While we want to have an abundance mindset, every goal cannot be your top priority. Understanding what you want your life to look like – then creating processes to get there – will improve your goal-setting and follow through. Whether these goals are formed when the ball drops in Times Square at midnight or on a random Tuesday morning at your breakfast table, take the time to develop a plan and accountability method to make your dreams a reality.

About the author: Kurt Wunderlich, CFA, CFP®

Kurt Wunderlich, CFA, CFP®, is a client development advisor at Buckingham Strategic Wealth, where he works with a team focused on delivering an outstanding financial life planning experience that helps clients connect their money with their most important and deepest-held values.

Important Disclosure: The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Wealth®. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. Individuals should speak with qualified professionals based upon their individual circumstances. The analysis contained in this article may be based upon third-party information and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. IRN-21-1803


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