Do Goals Really Do Anything?

by mike on November 11, 2011

Many talk about setting goals. In fact, you will often read or hear people suggest that you should be setting goals. I don’t know about you, but sometimes I am skeptical about things like this. Can we really utilize goals to improve our financial lives? I have come to believe that the answer is indeed yes.

There was a study done on Harvard MBA students and found that only 3% had clear, written goals. These are super smart Harvard MBA students right? That 3% is actually representative of the country at large. Here is the crazy thing about the study. Ready? After 10 years, the 3% of goal-setting Harvard grads were earning, on average, about 10 TIMES the other 97%. That’s right. If the average Harvard MBA grad was making $60,000 per year, the 3% that had written goals when they were in school were averaging $600,000 per year ten years later. That is nuts!

The thing is, Mandy and I have found it to be very helpful to set goals in our financial life as well. It really helps us to focus on our spending. If we have something very specific (like a vacation to save for), it will prevent us from wasting money on other things. For example, we may decide to not go out to eat because we would rather put that money in our vacation fund. If we didn’t have a goal of saving $2,000 by next July for vacation (notice it has a time limit and can be measured), it would be easy to get sloppy with our finances.

The perfect time to create goals is at the beginning of the year. Actually, not true! The perfect time to create goals is now! What else do you have to do this weekend?

Photo Source: Sean MacEntee

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