How a Master List Can Help You Prioritize Your Goals
Written by Rita Silvan | Published on July 25, 2019
Written by Rita Silvan | Published on July 25, 2019
Setting financial goals is hard. We all have multiple, often competing, goals for the available resources we have. Some of our goals are about avoiding things, like not being able to pay our bills, while others are about gaining things, like as much wealth as possible. Some require us to avoid risk, others to embrace it. This often means difficult trade-offs are required.
According to one investment research study, a goals-based financial plan could add around 15 per cent to a hypothetical family's wealth.
To make things even more challenging, behavioural biases often come into play. Some studies have shown that when asked to recall our top three goals, we're likely to choose those that come to mind first, which aren't necessarily the most important to us. This can lead us to pursue the wrong goals. A simple nudge, like using a master list, can help us choose the ones that truly have meaning and motivate us.
Quite simply, a master list is just as it sounds. It's a list of all the "big things" that you need to (or want to) do at some point, all written down together and kept in one place. In this case, it has to do with our money aspirations. When it comes to goal setting, there are key benefits of using a master list, including:
The benefits of choosing goals correctly are numerous. According to one investment research study, a goals-based financial plan could add around 15 per cent to a hypothetical family's wealth. Another study estimated that a retiree's wealth could increase by almost 23 per cent by doing things like identifying goals, determining a strategy, implementing your plan and reviewing progress.
Goals are personal, of course, but sometimes we need a list of ideas to help get us started. An RBC poll of 2,000 Canadians aged 18-plus released last year offers some good kick-starters. Among the financial priorities identified in that study were things like:
Other ideas might include vacation, leaving an inheritance or supporting charitable causes.
Once you've got your master list, you can start narrowing things down or prioritizing. Try whittling down your list to three to five, then rank them in order of importance.
For more, check out the goal-setting tool to help you track your progress.
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