Achievement Unlocked
As a product of my generation, I am a big fan of video gaming. I have had a console or computer for gaming at home since middle school. Throughout that time, gaming has been something that I have enjoyed both individually and with friends. I also recently learned that psychologists have been looking at the positive impacts that total absorption into a task, like video gaming, can have on your mental state.
One thing that has become ubiquitous with gaming is the idea of an Achievement. The game designer creates a specific set of parameters that the player needs to achieve, and the player is rewarded with a digital “trophy” and a popup with some nice congratulatory sounds. You can imagine some simple achievements easily, such as completing a game entirely or getting through a particular level. The reason for designing these rewards into games is pretty obvious: it keeps players more engaged with the game. In some games, players can even “complete” the game, but still have additional things that they can work on within the game. Achievements also give players a sense of direction beyond the story arc of a game, providing bite-sized chunks for players to work towards.
Keeping engaged with your finances and financial plan is something that many struggle with. For most (not including myself, as I work with this “boring stuff” everyday), working on your budget, saving for retirement, or updating your estate plan not only is slow and tedious but also often has some level of cost to it, whether that is actual out of pocket costs or the time and attention required to work through the topic. Tedious or boring work tends to be work that we stop doing after a certain point. This is why creating goals for your finances is so important. Much the same as video gaming achievements, financial goals give us structure and direction for the boring stuff.
I have written about Statement of Financial Purpose (SOFP) and how your vision statement for your finances sets the tone for your financial plan. In keeping with this analogy, this SOFP is like saying, “I will complete 100% of this game.” Ok, great! That’s obviously the point of playing the game, but how on earth do you achieve that, especially when you have to dedicate over 100 hours to complete this task?
Financial goals enable us to break difficult or long tasks into bite-sized chunks much in the same way that gaming achievements do. They help keep the player/person engaged with the topic and make the process feel more feasible. While financial goals don’t come with a trophy and a nice congratulatory sound (although, maybe that’s something we should work on here at the office?), checking off an item or hitting a target has a similar effect on our psyche as getting a trophy or being congratulated for a job well done.
Not all goals or achievements are created equal though. When creating financial goals, we want to make sure that they hit a few key criteria to make them easier to engage with.
Goals should connect to your core values (read: SOFP) and your personal why, as it makes them more resonant to your situation and makes them feel more worthwhile.
Goals should be empowering or challenging but attainable, as it helps drive belief in oneself. This sense of accomplishment helps keep the ball rolling, as you start to mark these challenging but achievable goals off the list.
Goals need to be actionable, meaning that they need to be small enough that they are attainable in a defined period. This contrasts to SOFP where the statement tends to be more nebulous and less time bound.
Finally, goals need to be lucrative. This doesn’t always mean a monetary target. Instead, the outcome of the goal should have meaningful impact on your life.
Samantha Kris has an excellent TED talk on this Resonance, Empowerment, Actionable, Lucrative goals framework that is worth a watch.
Goal setting is a cornerstone of the financial planning process. Much in the same way games use achievements, financial goals provide a financial plan with direction and keep us engaged with the plan over the long term. Goal setting is a way to build momentum from where you were with your finances to where you want your finances to be. Being intentional in how we create them is key to driving the expected follow-through. So, while we continue to work on a digital trophy and congratulatory jingle for completing your financial planning goals, you might consider what your financial goals are and how to use them to build momentum towards a better financial future. Or, just go play some video games.
