Setting goals is the first step in turning the invisible into the visible.
~ Tony Robbins
Ask anyone you know if there is something they would like to improve in their life. Most likely, the answer will be yes. Even if we know what we would like to work on, pinpointing what actions to take to make our situation better is a little less clear.
Goal setting is a great exercise for adding direction and structure to an ill-defined desire for change. However, not all goal-setting exercises are created equal. Your chances of actually reaching your goals depend on how and why you set them [1].
Take, for example, New Year’s Resolutions, which have a failure rate of between 60 and 80 percent [2, 3]. Why are resolutions so horribly ineffective? One key reason is that they are often too vague.
Being healthier in the new year is an admirable goal, but what does that mean exactly? More exercise, a more nutritious diet, or a more positive outlook? Also, how do you know when you’ve reached your goal, or if you’re making adequate progress?
You can see how vague goals can lead to another problem- goals that are unrealistic. If being healthy meant all the above, you would have to make many life changes at once. This does not bode well for success, as most people find this much change overwhelming and thus demotivating [4].
Resolutions also lack the relevance that motivates people to change their behaviors. Most people set goals that are either health or work-related [5]. While it never hurts to improve your health or make more money, you may experience a bigger boost to your well-being by focusing your energy on a different area of your life.
So, if you’re serious about making life changes, what kinds of goals should you set?
We can find some inspiration from the business world, which places a heavy emphasis on results.
When organizations set their goals for the upcoming quarter or year, they go through a process called strategic planning. Strategic goal setting applies this process to setting personal goals.
What is Strategic Goal Setting?
In a nutshell, strategic goal setting is goal setting with an action plan. You can think of strategic goal setting as a roadmap that can bring you from where you are to where you want to be.
You can also visualize strategic goal setting as a pyramid. In order to reach your ultimate goal, you will have to accomplish smaller goals along the way.
When compared to non-strategic goal setting, like New Year’s resolutions, strategic goal setting has several advantages.
All of these features make it much more likely that you will reach your desired goal [6].
If you want to give strategic goal-setting a try, you can follow the steps below.
6-Step Process for Strategic Goal Setting
Step 1: Perform a Life Audit
While goals are deeply personal, many of us do not set goals based on our own values or interests. Instead, we may look at what society tells us are markers of success.
For example, a six-figure salary is commonly touted as a desirable goal. However, many people do not need that level of income to fund their desired lifestyle. If working towards a higher income means ignoring a more important facet of life, reaching this goal could reduce well-being rather than enhance it.
For this reason, strategic goal planning starts out with an assessment of your current situation.
By reflecting on your satisfaction with your life, you can determine which sectors need the most attention. Then you can focus your limited energy, time, and resources on making improvements where they will have the most impact.
There are several ways you can perform a life audit.
The Seven Key Areas
The Seven Key Areas is a concept from personal development that divides life into 7 major categories:
Being content in most or all of these areas is a prerequisite for mental and physical well-being [7].
You can assess these areas by giving a score from 1 to 10 in life satisfaction. You can list what is working well, and what could be improved. Here is an example below:
| Key Area | Going Well | Needs Improvement | Score |
|---|---|---|---|
| Financial | Paying off debt Saving every month | Inconsistent income Not following my budget | 2 |
| Health | Eating fresh produce Drinking enough water | Little to no physical exercise | 8 |
| Community | Talk to friends regularly on the phone | Not seeing people in person Not making new connections | 3 |
Wishlist
This exercise is great for turning dreams into concrete goals. It can also help you visualize your goals on a longer time horizon.
To complete the Wishlist life audit, start by answering the following questions:
What are three goals you hope to reach in…
When you complete this exercise, you may find that your short and long-term goals do not align. For example, you may want to start a new business within three months and apply to graduate school within a year.
While this would not be impossible, pursuing both of these complex goals at the same time would mean dividing your energy and resources.
This doesn’t mean that you need to give up on either goal. Instead, see if you can change the time horizon. For example, if graduate school aligns better with your other goals, such as starting a new career, you can move that goal forward. Starting a business can be a goal that you pursue in three years, after gaining more experience in your new field.
LifeScore
The LifeScore assessment is a questionnaire developed by personal development author Michael Hyatt.
The assessment measures your life satisfaction levels across 10 different areas. A score of 7 or higher indicates high levels of satisfaction. Once you’ve completed the questionnaire, you can view your LifeScore and recommendations for setting goals based on your results.
You can try out the LifeScore assessment here: LifeScore 2022 Edition.
All these life audit exercises will give you insight into the areas of your life that need the most attention. Choose the three areas that have the lowest scores for the next step.
Step 2: Brainstorm solutions to reach your goals
Now that you’ve identified your problem areas, you can think about possible solutions. Let’s use the lowest-scoring domain from the Seven Key Areas example.
| Financial | Problems | Possible Solutions |
| Inconsistent Income | Get a part-time job Learn a more in-demand skill Boost marketing |
|
| Not following my budget | Be more self-disciplined Try money-saving challenges Learn more about money and financial literacy |
Brainstorming is a great way to generate ideas, but as you can see, it’s not so good for making a strategic plan. Some of these solutions are too broad and ill-defined to be helpful goals.
Also, implementing all these solutions would take a lot of time and resources. Instead, let’s select a couple of solutions to refine into actionable goals.
Step 3: Narrow down and refine your goals
We can narrow down the solutions we want to focus on by keeping in mind our long-term goals.
For example, while earning more could solve the problem of an inconsistent income, it won’t solve the budgeting issue.
In fact, reigning in spending and being more disciplined with money could eliminate the financial problems caused by an inconsistent income. For this reason, let’s work on improving self-discipline and financial literacy first.
When we are creating goals, they fall in one of several categories:
Avoidance goals: These are goals focused on reducing or eliminating a behavior. For example, I will stop smoking, or I will stop shopping online. Avoidance goals can be motivating, but that motivation is usually short-lived [8]. This is because avoidance goals are more effective when combined with an external punishment or reward, which can dampen intrinsic motivation. If a goal will take a long time to achieve, setting an approach goal may be more beneficial.
Approach goals focus on what you will do rather than what you will not do. So, if your avoidance goal is to stop shopping online, think of the behavior that you would like to reinforce instead. For example, you can set a goal to put more money into savings or to create and stick to a budget.
Performance goals: These goals are based on a standard that you set yourself. You can decide to increase your savings by 50% or go to the gym three days a week. Meeting a performance goal is completely within your control.
Outcome goals: These goals are similar to performance goals, except the standard is set by external factors. Getting a raise or winning a race depends on much more than your own efforts. You can do your best to get the outcome you desire, but the final decision may be outside of your control.
Mastery goals: These goals are blend between outcome and performance goals. In this case, you use an established standard to measure your success. However, you have much more control over the outcome. Some examples of mastery goals include passing an exam or attaining fluency in a new language.
There are benefits to setting each type of goal. However, incorporating smaller performance and mastery goals into a larger outcome goal can fuel your motivation.
The self-discipline and financial literacy goals we chose above fall into the mastery and performance categories. We can write these goals in a positive way that includes the behavior we hope to promote.
Our goals now have a bit more direction, but they are still too broad. Effective goals include three components:
The first goal, I will have more financial self-discipline, only has the “what.” We need to add a “how” and a “result” that are motivating and relevant to the ultimate goal of following the budget. We can do this by adding action words and defining what it means to have self-discipline.
I will have more financial self-discipline (WHAT) by following money habits and routines (HOW) that will prevent me from overspending (RESULT).
Now, this goal is refined. Let’s do the same for the second goal.
I will improve my financial literacy (WHAT) by taking personal finance courses (HOW) that will teach me how to budget, save, and invest (RESULT).
Step 4: Create milestones
Milestones are like mini goals that we will reach along the way toward the ultimate goal. Breaking down the process into smaller steps keeps you motivated and makes achieving your goal more manageable.
🔗 Recommended reading: Why Milestones are the Secret to Successful Goal Setting.
In the following podcast clip, Stanford professor Dr. Andrew Huberman discusses how milestones activate the brain’s natural reward system: The Dopamine Power Of Setting Little Goals.
Milestones are most effective when they follow the S.M.A.R.T formula.
| Definition | Good Example | Bad Example | |
|---|---|---|---|
| Specific | Are narrowed down to a particular action or result | Read three books about personal finance | Learn more about personal finance |
| Measurable | Can be assessed quantitatively | Increase my savings by 25% | Save more money |
| Achievable | Can be reasonably accomplished based on current circumstances | Limit non-essential spending to 10% of disposable income | Spend no money on entertainment or clothes for 1 year |
| Relevant | Related to your goal and your life | Invest 15% of my income to reach my savings goals | Learn how to trade on margin |
| Time-bound | Set a deadline for accomplishing the milestone | Save $1000 within six months | Save $1000 when I can |
When taken together, your milestones will lay out a path that you can follow to reach your end goal.
| Milestone 1: Research personal finance courses and enroll and complete the course within 3 months | Milestone 2: Create a budget based on what I’ve learned from the course within 1 month. The budget should allocate money to savings and investing | Milestone 3: Use my budget to help me build an emergency fund of $1000 within six months and consistently invest 15% of my income for six months | Milestone 4: Continue to follow the budget for at least 6 months | Ultimate Goal: I will improve my financial literacy by taking a personal finance course that will teach me how to budget, save, and invest |
|---|
Step 5: Create a check-in ritual
Goals are not like crockpots- you cannot just set and forget them. That is because sticking to your goals and completing the milestones you set takes a lot of willpower [9]. While we never completely run out of willpower, it can get low.
Checking in on yourself is a great way to refill your willpower tank. It can even improve your chances of reaching your final goal [10]. Here are a few ideas for monitoring and celebrating your progress:
Journaling pages
Writing down your goals is associated with a higher level of goal attainment [11]. You can make a ritual of answering the following questions on a daily, weekly, or monthly basis.
Reward systems
The brain is highly motivated by short-term rewards. If you’re working towards a long-term goal, the reward may be weeks or even months down the road. You can shorten the distance between rewards by creating a system that recognizes and celebrates your smaller achievements.
Mindset coach Scott Swalwell goes over three different types of reward systems you can try to keep yourself motivated: How To Reward Yourself For Meeting Goals.
In the video, he describes the following reward systems:
Habit-based- Assign a point to a habit that is key to reaching your goal. For example, you can award yourself a point for every day you don’t buy a non-essential item. Once you hit a certain number of points, you can reward yourself. However, the reward should not derail your goals. A book would be a sensible reward for completing a 30-day no-spend challenge. A new car or expensive handbag wouldn’t be so reasonable.
Inner World Reward- Mentally review your accomplishments and give yourself some praise. If you are especially proud of something you did, create a brag file on your computer or in a journal and record the event. You can use this list as inspiration on days when your willpower is low.
Milestone Goals- Set incentivizing rewards for reaching your milestones. You can celebrate saving $1,000 with a dinner at your favorite restaurant or playing a few rounds at the bowling alley. As long as the reward is something you look forward to, it can be motivating.
Step 6: Review and adjust your plan
The most effective type of strategic goal setting is dynamic. This means that you should adjust your plan in response to changes you encounter. There are a few scenarios where you should consider taking a pause and reviewing your goals:
Remember, changing your goal or your strategy is not equivalent to failing or giving up. Goals are meant to improve your life. If you have different needs or desires today than you did six weeks or six months ago, congratulations, you are growing! When you set strategic goals, staying flexible is key to achieving successful outcomes.
Strategic goal setting summed up
[1] Höpfner J and Keith N (2021) Goal Missed, Self Hit: Goal-Setting, Goal-Failure, and Their Affective, Motivational, and Behavioral Consequences. Front. Psychol. 12:704790. doi: 10.3389/fpsyg.2021.704790
[2] Dickson, J. M., Moberly, N. J., Preece, D., Dodd, A., & Huntley, C. D. (2021). Self-Regulatory Goal Motivational Processes in Sustained New Year Resolution Pursuit and Mental Wellbeing. International Journal of Environmental Research and Public Health, 18(6), 3084. MDPI AG. Retrieved from http://dx.doi.org/10.3390/ijerph18063084
[3] Shainna Ali Ph.D. (2018, December 5). Why New Year’s Resolutions Fail. Psychology Today. https://www.psychologytoday.com/us/blog/modern-mentality/201812/why-new-years-resolutions-fail
[4] American Psychological Association. (2010, October 1). Making lifestyle changes that last. https://www.apa.org/topics/behavioral-health/healthy-lifestyle-changes
[5] Martin Armstrong. (2022, January 11). Infographic: Top U.S. New Year’s Resolutions for 2022. Statista Infographics. https://www.statista.com/chart/26577/us-new-years-resolutions-gcs/
[6] Frank L. Smoll Ph.D. (2013, November 18). Keys to Effective Goal Setting. Psychology Today. https://www.psychologytoday.com/us/blog/coaching-and-parenting-young-athletes/201311/keys-effective-goal-setting
[7] PennWest Clarison. (n.d.). Wellness Wheel. Www.clarion.edu. https://www.clarion.edu/student-life/health-fitness-and-wellness/office-of-health-promotions/wellness-wheel.html
[8] Kinoshita K, MacIntosh E, Sato S. The Relationship Between Avoidance Goals and Goal Attainment: A Moderated Mediation Analysis. Res Q Exerc Sport. 2020 Sep;91(3):394-404. doi: 10.1080/02701367.2019.1676370. Epub 2020 Jan 6. PMID: 31906802.
[9] American Psychological Association. (2019, December 9). Harnessing willpower to meet your goals. https://www.apa.org/topics/personality/willpower-goals
[10] American Psychological Association. (2015, September 28). Frequently monitoring progress toward goals increases chance of success [Press release]. https://www.apa.org/news/press/releases/2015/10/progress-goals
[11] Gail Matthews. (n.d.). Harvard Goal Research Summary. Dominican University of California. https://www.dominican.edu/sites/default/files/2020-02/gailmatthews-harvard-goals-researchsummary.pdf
