With summer nearing its end, you may already be planning for the second half of the year. Kids will head back to school, families start making holiday plans, and year-end financial goals and expectations may be top of mind, too. Since the upcoming season is a busy one for the economy, it’s a good idea to make a financial plan for August through December. Setting specific, results-oriented benchmarks, however, can make some people extremely nervous. This approach implies that if you don’t get the exact result you plan for, you have failed. Luckily, there’s another way to practice goalsetting, and in this article, we will discuss the merits of using compass goals to help you hit your financial stride for the second half of the year.
Breaking Down Compass Goals
Compass goals are a relatively new concept, and many people find them to be a more creative, less stressful way to develop a year-end fiscal road map. Rather than focusing on firm, tangible results, compass goals are somewhat more philosophical. They emphasize the journey more than the destination, with an aim to infuse a sense of happiness into your planning. This is because compass goals target smaller rewards along the way — not just the big goals at the end.
Technically, compass goals aren’t necessarily goals in the traditional sense. They’re more like principles for guiding your progress toward a certain point. Compass goals are oriented toward the experience rather than the result. They set you up to enjoy life as you progress, not just after you achieve (or don’t achieve) a specific outcome.
In contrast, setting results-oriented goals can make some people fraught with anxiety. They can set you up for a negative mindset: If you get your goal, you win, and if you don’t, you lose. The stark reality of that strict, binary choice may be motivating for some people. If traditional, results-oriented goals are working for you, stick with them! However, if traditional goalsetting makes you feel a sense of dread, maybe compass goals are a better option. After all, it’s never ideal to make plans for your future under a cloud of fear or panic since these emotions can negatively affect your choices.
Compass Goals: The Great Motivators
In the realm of financial goal setting, positivity is often a better motivator than fear. Compass goals are all about setting up small opportunities for happiness and prosperity. When you win those easily attainable emotional rewards, the resulting motivation can spur you on even further.
With compass goals, you don’t focus on something you want. Instead, you aspire to a way of being. Motivation for an aspiration feels much different than struggling toward a goal, and you might find it more actively inspiring.
Someone who can generate continued, inspired motivation is more likely to achieve the results they want. More importantly, they may discover they desire something else even more than their original target.
Compass Goals Step-By-Step
So, how can you weave compass goals into the concrete act of making year-end financial plans? Let’s take it step-by-step since this process is very different from the goalsetting you may have tried in the past:
Start With Aspirations. Think more about who you want to be rather than what you want to get. This aspiration could be anything: “More financially independent,” “philanthropic,” “open to new experiences,” and “more internally at peace” are a few examples. What aspirations make you the most enthusiastic and passionate about reaching them?
Take Small, Regular Actions. Come up with regular steps toward your overall aspirations that will improve your present life, too. These could include making regular contributions to your retirement fund, slightly increasing your regular debt payments, or investing spare change in sustainable companies — anything that inspires personal satisfaction and discipline.
Track Your Progress. How do you measure advancement with compass goals? You could keep records of your contributions to an IRA to chart how much you’ve saved. You can establish milestones along the way, rewarding yourself when you hit certain amounts. You can make regular checkups on a charity you donate to and see how it benefits from your support. Find a way to turn your progress into a numerical data point. Too many people stumble when they try it the other way around.
Expect the Unexpected and Reap the Rewards. Even though you can’t define unexpected events, you can anticipate them. Consider what smaller experiences in your year-end journey may help you grow, give you renewed confidence, improve your relationships, or simply make you feel better.
For example, reviewing a budget for holiday expenses may inspire you to check in with friends and family. Making smaller, more consistent debt repayments may drive you to improve other aspects of your life, such as your relationships or education, using the same approach. Even reviewing your end-of-year balance sheet can stimulate feelings of personal growth and responsibility.
Can You Reframe the Second Half of the Year with Compass Goals?
The intangible nature of compass goals doesn’t have to contradict your data-rich, end-of-year financial plans. These goals inform your plans by linking to a higher sense of purpose. Especially during a time of year when many thoughts turn to goodwill and personal betterment, compass goals can make your financial situation — and your life — more meaningful. While it’s a concept that won’t work for everyone, it can certainly inspire those who struggle to set – or stick with – traditional goals.
Are you actively planning for the second half of the year? As you assess your financials and look toward the future, consider whether an experienced financial advisor can help you achieve your aspirations. At Principal Preservation Services, we work with both individuals and businesses to create personalized financial roadmaps. Contact us today to discover how we can help you achieve more with the resources you have.
