Raises, Refunds, and Windfalls: How To Make The Most Of Positive Financial Changes

Not all goals are equal in their achievability. In fact, 92% of people don’t reach the goals they set.1 While goals can be difficult to achieve, they’re not impossible. However, the best way to set yourself up for success is to set meaningful goals.

A meaningful goal sets itself apart from a standard goal in three main ways.

1. It’s Specific and Measurable

The more specific your goal, the more likely you are to reach it. According to one study, setting specific goals led to a higher performance 90% of the time.2 The reason for this is fairly simple: the clearer the path, the easier it is to follow it to the final destination.

I hear so many people tell me their goal is to save more, spend less, or build a retirement fund. The problem with these goals is that they lack specificity. Saving more could mean saving $10 per month or $1,000 per month. You can’t track your progress or know if you’re on track toward your goal if you haven’t specified it and you can’t measure your progress.

One of the first things I tell clients is to make their goals as specific as possible. For example, instead of “build a retirement fund,” you can specify it to “build a retirement fund of $100,000.” Finally, make it measurable—”build a retirement fund of $100,000 by age 45.”

2. It’s Relevant to Your Life

A goal is only meaningful if you’re passionate about it. Those who meet their goals do so not just because they’re hard workers, but because they are passionate about what they want to achieve. Their goals reflect their values and interests, rather than being random or something they think they’re supposed to achieve in life.

For example, some clients tell me they want to build their savings account because they’ve been told that’s what they should do. While true, you likely won’t feel very inspired to save more if you don’t have a reason for it that makes sense for your life.

I tell these clients to think of what having a savings account would mean for them. Would they feel they could sleep better at night? Would a savings account mean they could go on an annual family vacation? If they build a savings account up to a certain amount, could they finally upgrade their unreliable and problematic car?

Whatever your goal, you should be passionate about it and it should be relevant to your life, not what you think you’re supposed to achieve.

3. Frame it Positively

We’ve all heard about the power of positive thinking, and it translates to your goals, too. We are much more likely to work toward something we want to achieve or do rather than what we want to stop doing or don’t want.

For example, rather than a goal of “stop overspending” or “spend $200 less each month,” frame it in a positive light: “spend more mindfully” or “save $200 each month.” This can help you view saving as a good thing you’re supposed to do, rather than spending as a treat that you no longer should do. It’s easy to reverse any goal, so there’s no excuse not to!

Don’t Go it Alone

The process of setting a goal is just as important as the process of working towards it. Think of your goal as the frame of a house. You can’t build a stable home without the proper foundation and a clear blueprint.

If you’re struggling to achieve your goals or aren’t sure how to set ones that are meaningful, an advisor can help. As an independent financial advisor, my mission is to make a meaningful impact on the lives of my clients and the people they love. I help families make informed decisions with their money and pursue a strong financial future, from setting meaningful goals to guiding them along the path toward the finish line.

Contact me for a no-strings-attached meeting to discuss your goals, how to make them meaningful, and what strategies can help you pursue them. Call my office at (949) 221-8105 x 2128, or email me at michael.loo@lpl.com.

1 http://www.inc.com/marcel-schwantes/science-says-92-percent-of-people-dont-achieve-goals-heres-how-the-other-8-perce.html

2 http://psycnet.apa.org/record/1981-27276-001

“What’s top of mind?” is an incredible starting point for a financial planning conversation. A client will oftentimes start with a story, not the balance of their retirement account or what they spent last month on dining out. More recently, children have been top of mind for a lot of families. How should we pay for college? Should we pay for college? I want to save for my child, but have more flexibility than an education account. Education and the cost of college is the obvious priority with kids. I’ll suggest protecting your child with life insurance with accelerated benefit riders as a second priority. Let me explain, after you just tensed up and committed yourself to not discussing.

As a parent, I pray nothing happens to my two sons. Unfortunately, I don’t have complete control of that outcome. Here are three reasons why I’ll suggest life insurance for your child.

Accelerated benefit riders give you access to the death benefit, if your son or daughter experiences a terminal diagnosis, chronic disability, or a critical event. If any of these conditions take place, I’m not going back to work the next day. I’ll living at the hospital, eating restaurant food, and spending money on unanticipated expenses outside of what health care pays for, without having to take a loan on my 401k or deplete my savings account.

A death benefit (unimaginable) provides peace of mind that if the worst were to happen, your family wouldn’t have to think about work, the mortgage, or time off. You simply could spend time together grieving the most difficult time in your life. Enough said.

The cash value growing inside of your indexed universal life policy (form of permanent insurance) creates a saving vehicles indexed to the S&P 500 over the life of the policy. If at a certain point in your now grown child’s life, you can surrender the policy and provide a jump start for their first down payment, wedding, or other significant event in their life, OR even give the policy to your child for them to now pay their own premium and have a level of life insurance in place.

Why don’t I invest my money in the market and have more to give to my child when he/she is grown? I agree with this philosophy, assuming none of the aforementioned events happen while your children are under your roof. Since the cost of insurance for a child is so low, I’m willing to protect my child first, then if nothing happens, I have an opportunity to gift them their starter policy as they start their own career and family. If you have a term policy in place, you can oftentimes add a child term rider for a small additional premium. Cheers to being a parent. If you have further questions about this type of planning, please reach out to Mark Nicolet, CFP®, at mark.nicolet@trilogyfs.com or 303-300-3323 ext. 5227.

This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This doesn't take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company.