Episode 130 – What If Your Financial Goals Are Wrong?
In this episode, David Lloyd is joined by Chris Budd and Tom Morris to ask a deceptively simple question: Are the goals we are working towards actually likely to make us happier?
Along the way, there is a tenth anniversary, free museums, homemade kitchen islands, unrealistic sporting ambitions and an important conversation about the difference between accumulating money and using it to support a meaningful life.
Welcomes and Introductions
Chris Budd – Reflects on the tenth anniversary of The Financial Wellbeing Book and the impact its ideas have had since publication.
Tom Morris – Managing Director of Ovation Finance. Award winning, Bristol-based, chartered, B-Corp certified and employee-owned.
Fancy a chat with Tom Morris and the team at Ovation? Contact details here
Tight Ass Tommo
Featuring free museums, YouTube tutorials and reusing old parts of your house in DIY projects.
Are Your Goals Making You Happier?
Setting objectives is generally seen as good advice.
Financial plans need goals. Athletes work towards targets. Businesses need direction.
People who focused mainly on financial success reported lower life satisfaction over time. Goals connected to relationships, helping others and social involvement were more likely to improve wellbeing.
That does not mean wanting a comfortable home, financial security or nice possessions is wrong.
It means those goals need to sit alongside the things that give life meaning.
Goals and Motivations
Tom explains the difference between a goal and a motivation.
A goal usually has an endpoint, such as retiring at a certain age, buying a house or completing a qualification.
A motivation is often ongoing. It might involve creativity, purpose, pride or helping others.
Some motivations are intrinsic, meaning we pursue them because they matter to us. Others are extrinsic, meaning we pursue them to impress or please someone else.
Understanding the difference can help us decide whether an objective genuinely belongs to us.
The Cost of the Wrong Objective
Imagine working longer hours for years to buy a bigger house, only to realise that the original house was perfectly adequate.
The financial target has been achieved, but the cost may have been time with family, friendships or neglected interests.
A goal can be financially successful and still fail to improve your life.
Are Your Goals Achievable?
Dreams have value, but our happiness should not depend entirely on something unrealistic.
The episode recalls Olympic diver Leon Taylor, who became so focused on winning a medal that the goal caused stress and unhappiness. Once he refocused on his love of diving, he performed at his best and won an Olympic silver medal.
The lesson is not to stop stretching yourself. It is to find the right balance between ambition, enjoyment and reality.
Three Questions to Review Your Goals
The team suggests asking yourself:
- When do you feel most excited and energised?
- Who or what do you want to make a difference to?
- How do you want to help?
Your answers may point towards family, creativity, community, charitable work, learning, teamwork or simply having more time available.
You do not need one grand life purpose. Something purposeful is enough.
Where Financial Planning Helps
Many people assume they need more money than they actually do to feel secure.
They continue saving and delaying the things they want to do because they are unsure what is possible.
Cashflow planning can help test different ideas.
Could you reduce your working hours? Retire earlier? Help your children now? Travel more? Return to an old hobby?
A good financial plan does not simply tell you how much money you have.
It helps you understand what that money can make possible.
Final Thoughts
Everybody has a financial plan, even if it has never been written down.
The important question is whether that plan is leading towards something meaningful.
Review your objectives and ask:
If I achieve these goals, what will actually be better about my life?
If the answer is unclear, it may be time to discuss them with your Financial Planner.
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