Buzz
When planning your financial objectives for 2019, think about the little, consistent actions you can take each day or week to progress towards your ultimate goals.
Becky Kane, writing for Fast Company, discusses why it's challenging for people to meet long-term financial goals, such as saving for retirement, due to how our brains are wired. She notes:
In simple terms, when you imagine your future self a month, a year, or even a decade from now, your brain perceives that version of you much like it would a stranger, like Taylor Swift, the mailman, or the person driving next to you on the road. From this perspective, saving for retirement feels almost like giving money to someone else entirely.
This isn’t a new discovery, but what’s crucial here is that some behavioral economists' methods to motivate savings, such as showing age-progressed photos of oneself, might not work if you still don’t see that future version of yourself as 'you'.
If our brains are wired to prioritize short-term rewards over long-term goals, what can we do to break this pattern? We tend to crave the quick satisfaction of completing tasks in days or weeks rather than in years. A practical solution is to make short-term goals manageable stepping stones that lead to bigger, long-term achievements. Kane writes, 'Whatever your long-term goals are—whether it’s getting in better shape, launching a business, or writing a book—thinking of your deadline in terms of days, rather than months or years, can help you see just how close the future is.'
For instance, if your long-term goal is to save more in your Roth IRA, setting weekly or monthly savings targets that are achievable will help you progress, and make you feel accomplished and motivated along the way.
To take it a step further, you can reframe your actions by focusing on the immediate rewards. Kane illustrates this idea with an example from her own experience of writing an article:
'I’m going to focus on the sense of accomplishment I’ll feel in just four hours, when I’ll no longer have to feel guilty about procrastinating on this task for so long. It’s become like a squirmy eel in the pit of my stomach every time I think about it.'
This is crucial because the process of achieving goals can often be just as valuable, if not more so, than the completion of the goal itself. Kane shares an example from Kaitlin Woolley of Cornell University and Ayelet Fishbach of the University of Chicago, who research goals and goal achievement:
In one study, we surveyed individuals online about the goals they set for the new year. Most people aimed for long-term gains, such as career progress, paying off debt, or improving their health. We asked these participants how enjoyable they found working toward their goal, how important they considered it, and whether they were still pursuing their goal two months after setting it. Our findings showed that enjoyment was a much stronger predictor of goal persistence than the importance people placed on their goal.
The researchers observed these results across a wide range of goals, including fitness, healthy eating, and education.
Woolley and Fishbach suggest that people incorporate enjoyment into their choice of activities to achieve their goals. While this might seem straightforward, it’s the immediate satisfaction that keeps you engaged. So, pick a workout class you genuinely enjoy, or find a way to save money that feels rewarding.
The researchers also recommend adding more immediate rewards to your tasks. They found that high school students worked longer on a math assignment when they listened to music, snacked, and used colored pens. 'Making activities more enjoyable, like listening to music while exercising or working in your favorite coffee shop, may help you stay motivated to reach your goals,' they write. Just because you're pursuing something doesn’t mean it has to constantly feel like hard work.
Lastly, it’s important to celebrate the small wins as you progress toward your goal. If you're saving money, periodically check your account balance and take pride in your progress. If you're getting fitter, notice when the five-pound weights start to feel easier to lift.
'We found that people consumed nearly 50 percent more of a healthy food when they concentrated on its positive taste, compared to another group that focused on its health benefits,' the researchers write. 'When pursuing a goal, focusing on the positive experience it offers can help increase your persistence.'
We’ve frequently emphasized the importance of taking small, steady steps to reach various goals. This approach applies to everything from exercise, writing, and playing the piano to managing finances. As you plan for 2019, think about the small steps you can take now that will provide you with the most satisfaction.
