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Goal-Setting Doesn't Work - Focus on Systems and Habits

How close am I with this story? You have a friend who is constantly watching his or her weight. This friend usually sets targets then goes on the hunt to hit the goal. Your friend tries different diets all the time. He or she tries different workouts. Often times, your friend hits the goal and lost some number of pounds. 

But, it's not long before your friend gains it all back. 

Goals Can Limit You

Goals, although limiting, can give you better odds of a good outcome versus not having a goal. Goals are also good when it comes to short term tasks and games. But by intensely focusing in on one single goal you run the risk of missing out on other opportunities that may have been presented. 

Think about a person whose goal is to get her boss' job. She is so focused on that one goal that she misses out on promotions that were available in different departments of her firm, or at different companies. 

Systems Work Better

Scott Adams, the creator of Dilbert, is the one who coined the phrase, "goals are for losers." In his book, How to Fail at Almost Everything and Still Win Big, he talks about using systems instead of goals. He defines a goal as something you reach and then you're done. A system is something you do on a regular basis that gives you more skills over time, and increases your chances of future success. The exact, ultimate outcome is unknown. 

So even though goals are good for short term tasks, they are awful at lifelong endeavors, like personal health, career success, and personal finance. 

Here are some examples:

  • Losing 20 pounds is a goal; eating healthy is a system. 

  • Going to the gym four times per week is a goal; being active every day is a system. 

  • Going after your boss' job is a goal; continuing to increase your knowledge and skills is a system.


On his podcast, Akimbo, Seth Godin talks about why people have a hard time learning to juggle. He says that most people spend their time focusing on catching the balls. As people do they they find themselves having to reach more and more to catch the balls. As they do this their throws become worse and worse. A better approach is to practice throwing over and over. Keep practicing your throwing until you can throw each ball to the same spot over and over again. If you can throw well, the catching takes care of itself. 

And since goals are focused on the outcome and systems are focused on the process, I like to think of throwing to be a system, and catching to be a goal. The goals take care of themselves when you have a good system. 

Financial Goals Are Just Guesses

Author Carl Richards, when training financial advisors, suggests not even using the word "goal" in the context of a client's desired lifestyle. Having a goal sounds so permanent, plus we don't really know what kind of life we'll be living when we are that far in the future. Life happens. So instead of coming up with goals he suggests coming up with guesses. We take a shot at the life you want, and then remain flexible about making course corrections over time. 

Money System

A good money system to use is to become clear about what is important to you and your family, and make some guesses around what your future looks like. Align your use of money with what you value, and be flexible to change over time. 

Focusing on specific financial outcomes is a goal. 

Aligning your money and your values is a system.

Keep Reading:


Scott Adams: How to Fail at Almost Everything and Still Win Big

Carl Richards: The One-Page Financial Plan


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© 2018 Money Health Solutions, LLC



About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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