'Financial goal setting': I hate that phrase!

March 22, 2016
There's something about goal setting that seems bogus to me, especially financial goal setting.

Brian Hufford, CPA, CFP

There's something about goal setting that seems bogus to me, especially financial goal setting. I know that sounds counterintuitive, but stay with me for a minute. Take, for example, common goals like: "I want to retire at age 55," or "I want to be out of debt at age 35." Perhaps my problem with this sort of typical financial goal setting is that it seems one-dimensional by nature, or that it is motivated by what I call single-step financial planning (see the February 2016 edition of this column).

I've found single-step goals, when achieved, are often accompanied by a sense of, "Is that all there is?" For instance, you may have gotten out of debt. So what now? More importantly, in my experience, single-step goals seem to create a kind of blindness regarding larger issues that characterize our relationship with money.

Perhaps the real issue surrounding money relates to how it creates support for, or forms barriers to, our freedom and our ability to live from our most deeply held values. Consider the following couple, a composite of many that I have worked with over the years. The husband and wife had conflicting values about money and between themselves. The husband, a dentist, felt stressed with the hectic pace of his practice and listed financial security as a primary goal. His spouse, who also had a stressful, high-paying occupation, listed supporting their children as her primary goal. I asked them the question, "If you had sufficient money now to support both of you for the rest of your lives, how would things change?" It felt like a bomb went off in the room.

The husband immediately said he would cut two days per week from his practice schedule, sell five of the rental properties that they owned, and eliminate all debt. He shared that the five-day-per-week practice schedule he currently maintained was necessary to eliminate all debt within five years, and that their rental properties merely enhanced his sense of financial security. The fact was that these rental properties also were very time consuming. All of this contributed to a hectic hamster-wheel existence. He also said he would be able to focus more on his passion for sailing and take longer weekend trips with the family. He stated that this was the family time most meaningful to him.

The wife shared that she would leave her high-paying consulting job at once to pursue her passion for art education by working at her children's private school. Her consulting income was needed to support the high tuition for their children. If she were a teacher at the school, the children could attend for free. The reality was that costs associated with a very large and expensive home, very expensive private school tuitions, and the husband's need to eliminate debt had created an untenable existence for the entire family.

My question connecting money with the couple's most deeply held values simply gave them enough space to put things into perspective. Single-step goals (like eliminating debt within five years) have the ability to sabotage progress toward even more important, deeply held values.

What about you? There are a couple of questions you can ask yourself to help discern whether or not your relationship with money conflicts with your values. It might take the same form of the question I asked the couple: "If you had sufficient money to support you now and for the rest of your life, how would your life change?" Another one might be: "If you had a terminal illness with only five to 10 years to live, what would you change about your life?" Similar questions are designed to expose gaps between your deeply held values and money-dictated behavior that conflicts with them. By replacing single-step goals (like retiring at age 55) with some real reflection about living a passionate life in which money doesn't decide the outcome, you might find that radical changes are necessary.

I find that most times, once a passionate existence has been imagined and a quest-like vision for the best life possible is deeply explored, the actual changes necessary to meet that reality are achievable. This exercise is so freeing that it deserves regular attention during your career. Don't ever allow single-step financial goals to get in the way of the passionate life you need.

Brian Hufford, CPA, CFP, is a wealth advisor and dental practice thought leader with Buckingham Advisors, a national, independent wealth and financial advisory firm with a specialty in helping dentists achieve their most important goals. To connect with Brian and Buckingham, visit BuckinghamAdvisor.com, call (866) 545-8816, or e-mail [email protected].

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