How to Build Accountability for Your Financial Goals

It’s really easy to set a big goal for ourselves that expresses a major change we’d like to make in our lives. My goals are often related to finances, fitness, and learning. Yours could be anything.

At the same time, it’s really hard to follow through on those goals for a number of reasons.

First of all, we often see goals as only mattering to ourselves. Internal goals are often seen as only having a personal impact, so if we don’t succeed, we’re the only ones that bear the consequences of that failure.

Second, we often don’t have a strong, rational plan for success. We might have a clear goal without any plan. We might have a plan that’s completely unrealistic in our life.

Third, we don’t have a culture around ourselves that encourages us to succeed. Often, the people around us aren’t even aware of our internal goals. Even when they are, that doesn’t necessarily mean they’re openly supportive of our goal.

Fourth, we don’t take significant personal pride in each step of success. We feel as though we can only have pride in our weight loss if we’ve dropped 20 or 50 or 100 pounds when we should be proud of the fact that we made good eating choices today or hit the gym today.

Finally, we don’t consistently review our progress and interpret our successes and failures. This is a vital part of any big goal that you’re trying to achieve. For my most successful goals, I’ve used a weekly review and sometimes even a daily review of my positive steps and setbacks. When I let that go, the goal falls apart.

What do all of these things have in common? Accountability. When we minimize the responsibility we feel toward that goal, we make it incredibly easy to just walk away from that goal, fall back into bad habits, and find ourselves right back in the difficult place where we started.

So, how does one build accountability? It’s not easy, particularly when it comes to individual goals (which is what many personal finance goals are). However, there are a number of steps you can take to increase accountability in your life.

Figure Out Who Holds a Stake in Your Success – Including You

Whenever you have a goal of any kind, there are some people whose lives are affected by the outcome of your goal. As a parent and a husband, for example, the success or failure of many of my goals have a direct impact on my wife and my children. Many of them also have an impact on my closest friends, my parents, and some of my closer family members.

That’s a lot of people, and thinking about that impact that my positive moves can have on their life (almost always in a positive way) raises my own realization of how important my goals are and how much really is at stake.

I’ll give you an example. When I was in the worst throes of my debts, I spent a very long night holding my infant son and thinking a lot about where my life was headed. I began to realize that the debts I was taking on not only had consequences for my own life, but it had consequences for my infant son’s life, too, and on my wife’s life as well, for that matter.

What about a financial example? Every time I overspend, it has a negative impact on me, but I can often decide that it’s “worth it” because I’m buying something that I personally want. I can judge that the consequences of that action are tolerable for me personally. If I spend $40 on a new board game, for instance, I could decide that I’m willing to deal personally with the consequences of that expense.

The problem is that, when I’m truly honest with the situation, that spent $40 doesn’t just impact me. It impacts my children and my wife quite directly. That spent $40 on that board game – which I’ll get much more enjoyment out of than my family will – means that we might have to skip going out as a family later on in the month in order to meet our budget. It might end up adding to a pile of debt. It might cause me to have to cut back on a gift or a small splurge for one of these people. It can also have further ramifications, like keeping me from going out for dinner with friends.

My poor financial choices – and other poor choices – have an impact that ripples out far beyond me. Those people all have a stake in my smarter choices. It isn’t just me on the line. It’s my wife and my children and my friends and my other family members. Sometimes, it’s even the larger communities that I’m a part of.

When I make that choice, to stick to my goal or to go off the rails, it’s not just me on the line. It’s all of them.

Think About the Consequences of Your Failure on Each of Those Stakeholders

Even though I realize that there are a lot of people who have a stake in my goals, I don’t always immediately recognize what exactly the consequences of failure are on those people. I find that if I spend some time really looking at how my failure will impact the lives of each of those people, I really see the ramifications of my goal.

Let’s roll back the clock to that night I mentioned earlier, where I was swimming in debt, holding my infant son, and thinking about the future. I was aware that I needed to make some changes in my life, but what really shook me was thinking about the negative impact of my continued behavior on that little boy.

If I failed in my envisioned financial change, what would happen? We’d continue to live in this tiny apartment. As my son grew up, he would have very limited space to play and explore. He didn’t have a safe backyard to go out and play in in a semi-unsupervised way. We wouldn’t be able to afford to enroll him in some extracurricular activities. We wouldn’t be able to afford to travel very much with him and let him see the wonders of this country (let alone others). We wouldn’t be able to save for his college education as we’d barely be able to keep our own heads above water. In short, my failure at this goal reduces the quality of his childhood and his opportunities, too.

At the time, I didn’t really think too much about it, but there would be a negative impact on Sarah, too. Her opportunities would be much more limited because of my poor financial choices. It would be much harder for her to change jobs, for example. We wouldn’t be able to visit our parents as much, either, nor would we be able to see her sisters. My friends would feel the impact of my continued stress about our financial situation, as I simply wasn’t very happy at that time in my life.

The impact of failing at our financial turnaround would affect a lot of people with real negative consequences. Seeing those consequences – and revisiting them regularly – made that goal much more powerful.

Think Also About the Benefits of Success on Each of Those Stakeholders

On the flip side, actually achieving my financial goals (or at least moving forward on them at a steady rate) has benefits for your stakeholders, too. The benefits of your success go far beyond you. They impact all of those people who have a stake in your success.

For example, when I was at that financial bottom, I could see that my positive financial choices would have a big impact on me, but they really spread out to almost everyone else of significance in my life.

My son, for example, would have a much better childhood if I got a grip on my financial choices. He’d have more opportunities in terms of his education and his experiences. He’d never have to feel true want in his life, either. These things held true for any future children we might have as well. I’d also be a better father with less stress in my life.

My wife would have many more career opportunities. If she chose to go back to school to get a master’s degree or a doctorate, she’d have much more freedom to do so if I got my financial game in shape. Our marriage would also become stronger with less stress.

My parents would have a tighter relationship with me and with my children, as would Sarah’s parents.

My friendships would become stronger as I would be less stressed out about everything in my life – my job, my money, etc. – and thus more enjoyable to be around.

It’s not just my life on the line here. The lives of everyone I care about becomes better if I achieve this goal.

Set Audacious Goals, Not Unrealistic Ones

One big problem that many people have with goal-setting is that they don’t distinguish between “audacious” and “unrealistic.”

An “audacious” goal is one that challenges you. It’s up to you to make it work. If you put in the time and the effort and the good choices, it almost always will happen.

An “unrealistic” goal is one that relies on the behaviors of others to succeed. Your contributions are part of it, but if other things far outside of your control don’t happen, your success won’t happen.

Saying that you’re going to be a millionaire in five years is usually an unrealistic goal. However, saying that you’re going to improve your net worth every single month by some method or another is usually just an audacious goal.

You want audacious goals. You don’t want unrealistic goals. So, how do you distinguish between the two?

Take your goal and ask yourself how many people and things could affect the outcome you desire. Then, ask yourself if there is a way to reduce the number of things that could impact it. Instead of making a job promotion your goal, make it your goal to do everything you need to qualify for that promotion, for example. Instead of starting a million dollar business, instead start a business that is strong enough to potentially grow into a million dollar business.

Focus your goals on what you can control as much as you possibly can. Obviously, you can never make things perfectly under your control, but you should leave as much of the power over success and failure in your hands as possible.

Communicate Your Goals to Your Loved Ones and Friends and Ask for Their Support

It’s easy to keep your goals to yourself and make them very personal things. Some do it for privacy. Others do it for pride.

The problem is that if you keep a goal to yourself, you don’t have anyone that you’re directly accountable to for your goal. Sure, your goal itself is accountable to others, as we discussed earlier – success helps the stakeholders and failure hurts them, but this is a different matter.

If you keep a goal to yourself, in the end, you’re the only one that really knows about the failure. It may impact others, but if you’ve never shared your goal, that negative impact stays hidden.

That’s why, if you’re really serious about a goal, you should tell your loved ones and friends about it and ask for all the support they can muster.

This helps in multiple ways. First, of course, is the accountability factor. If your friends and family know about your goal, they’re going to know if you succeed or fail. That will impact how they see you – they’ll see you as a stronger person if you succeed and as a weaker person if you fail.

Beyond that, friends and family can become an incredibly powerful support structure as you work toward a goal in your life. If you’re open with a positive goal, the people you care about – who are also stakeholders in your success – will help you succeed with camaraderie, advice, and sometimes even more than that.

You don’t have to make it very formal. Simply tell them that you’ve decided to start spending less money (or whatever your goal might be) and that you want their help in making it work. Ask that person for ideas or expertise. Tell them that you want them to say something when you slip up or when you’re in a potentially tempting situation. Celebrate with them as you make progress. They become part of the “team” that’s moving toward your goal.

Use a “Habit Checklist”

Many goals are accomplished by having good habits. There are a lot of techniques and ideas out there floating around about establishing good habits, but, for me, the best tool out there is what I call the “habit checklist.”

Essentially, I break down the big goal into daily habits and routines as much as I possibly can. For example, if I’m trying to cut my spending, I might switch to allowing myself one meal eaten out per week and no extra purchases at gas stations (just as an example). Those two items would go on my “habit checklist.”

Right now, I have a habit checklist of seven items. Each morning, when I get up, I look at that checklist. It includes specific things I want to do today (like practicing my guitar) as well as things I want to maintain throughout the day (like eating a vegan breakfast and lunch as per Mark Bittman’s “VB6” plan). I keep that checklist close at hand and look at it over and over throughout the day.

My goal, each day, is to check off all of the things on my habit checklist. If I can do that, then I know I’ve moved forward on my goals. In my mind, a successful day is one where I clear that habit checklist, and an unsuccessful day is one where I fail to check them all off.

So, how do you make a good “habit checklist”? I try to keep the steps as simple as possible. I’m a big believer in the “not zero” philosophy in that simply doing a very little bit is better than doing nothing and that when you do a little bit of something you believe in, you’ll naturally do more. For example, I might have something like “practice guitar for one minute” or “do one thirty second elbow plank.” Those are really easy to do, but if I already have the guitar on my lap, I’ll play for a while longer, and if I’m already down doing a plank, I’ll probably do two or three (and do some plank variations).

How does that apply to personal finance? Most of my finance-related items on my “habit checklist” are simply things that I shouldn’t do today. For example, I might have something like “no online shopping today” or “eat only leftovers for lunch and snacks.”

Remember, the goal with each item is to either break a bad habit or establish a positive new one. You should feel really good if you make it through your checklist at the end of each day.

Revisit and Review Your Progress Toward Your Goals on a Very Regular Basis

Obviously, over time, things are going to change. You’ll want to alter your “habit checklist.” You’ll want to actually evaluate your positive progress. Most of all, you’ll want to see whether or not you’re making good steps. You do this through review.

Reviewing your goal is a simple process. I recommend doing it each week. Just sit down and think about how you’ve done with regards to your goals this week. Have you made forward progress? What were your greatest single achievements toward your goal? Did you falter at some point in the week? Why? What can you do to replicate your highest achievements? What can you do to eliminate your negative achievements?

For me, at least, this kind of thinking enables me to see my own weak points and to actually think about improving them, which is a huge key for success. I often end up creating a report of sorts about how I’m moving forward from this point, both by eliminating negatives and accentuating positives.

The ideas I come up with during this review often alter my habit checklist. They also give me a lot to think about during my spare moments during the coming week, keeping my mind on my goal.

Take Personal Pride in Your Positive Achievements – But Let Your Failures Puncture That Pride

When you have a day that you complete your “habit checklist,” feel proud. When you have a week that went by without any major negative setbacks, feel proud. When something happens that enables you to take a big leap forward on your goal, feel proud. Feel good about yourself!

That doesn’t mean you have to tell the world about it – that pretty quickly dissolves into bragging, which can be off-putting. Instead, keep it inside. Use it to light your internal fire. You are doing good and you know it, regardless of what others think.

At the same time, when you fail and make a big mistake, you should feel bad about it. Your emotions are guiding you correctly. You’re not a failure and your goal isn’t hopeless, but a mistake has consequences. It’s a step backward on your path, one that takes you further from where you want to go. You can still get there, but you shouldn’t just ignore mistakes. Mistakes can turn into a pattern, and a pattern of bad moves means you stop making forward progress.

When you review your week and it’s been successful, be proud. When it’s not, don’t be afraid to feel bad, but focus on what you can change and do better going forward.

Final Thoughts

Accountability is a vital part of almost any goal you might take on in life. Without it, it’s really easy to just give up and walk away from a goal. The key is accountability, and you can build accountability all over the place by knowing your stakeholders, building a smart goal, establishing habits, sharing things with others, reviewing your progress, and taking pride in your positive moves.

The stronger your accountability, the stronger your goal and the greater the chances for success. Good luck.

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