Updated on 09.08.14

Ten Big Mistakes #10: Poor Goal Setting

Trent Hamm

A good goal, no matter how big it is, gives you an exact target to shoot for, a way of measuring your progress towards that goal, and the possibility of activity today to move you towards that goal.

At the start of my financial journey, I had no specific goals, either in the short term or the long term.

That’s not to say that Sarah and I never thought about the future – we certainly did. The problem is that it was always in the sense of vague things that would happen “someday” and didn’t require any sort of active response today.

We dreamed of having a house of our own. I had a dream of a different career. We had dreams of having a certain number of children and providing all sorts of wonderful things for them.

Those are certainly great goals to have, but they’re so unspecific that they don’t mean anything. Worst of all, they didn’t require us to do anything today to start moving towards them, which enabled us to keep wandering through life.

None of our goals back then had any of the characteristics of good goals, which is why they weren’t really goals at all, but pipe dreams.

What woke me up and made me realize that something was wrong with this type of goal-setting was the fact that we were actually moving further and further away from these goals as time went on. As we got more into debt, we moved further away from having a house of our own and further away from my dreams of being a writer. We certainly weren’t doing a good job of financially providing for our son.

As we grew into our late twenties, we began to see that our big “dreams” were slipping away from us. It was a very, very painful time, one that shook us into making some serious changes in our lives.

What changed? One big change is that we started talking about these kinds of things in more detail. What did we both really want from our lives together? What do we need to do to get there? What can we do today to start moving us there? Addressing these questions with seriousness helps you quickly figure out what things you really want from life and whether you’re willing to work hard to have them.

The lack of goals earlier on in our lives cost us dearly. If we had these types of specific goals with specific plans in mind when we graduated from college – or even earlier – I shudder to imagine where we would be at right now.

How to Avoid Poor Goal Setting

1. Set the kind of concrete, tangible goals I describe above.

As I said, a good goal gives you an exact target to shoot for, a way of measuring your progress towards that goal, and something you can do today to move towards that goal. If you’re having difficulty coming up with these things, it might be a sign that this isn’t really a key goal in your life (which isn’t a bad thing at all – getting rid of goals that you’re not committed to makes room for the goals you are committed to).

2. Constantly remind yourself of that goal.

No day should pass without at least a bit of reflection on what you can do today to move towards the goal – and actual action on that idea. Again, if you’re not willing to take the daily action, it’s time to reflect on whether or not those goals are really in line with what you want out of life.

3. Be willing to share these goals with others.

Support from those most important to you can really make a difference in terms of whether you can achieve the things you dream of. Talk to those people about your goals and how you plan on getting there. Don’t be afraid to ask for help, particularly through the rough spots. It’ll make more difference than you can imagine.

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  1. Andy says:

    Haha this is great. I just set a new goal for myself this week, and I’m pretty excited about it.

    I own a business where I do work for events, mostly on weekends. I can do two events a night, at most 4 per week. To date I only make around 9k a year from this freelancing fun job, but I’m only working a 10th of its potential. I decided my goal was to go from 10% potential to 50% and get 100 contracts for 2011. It’s going to be REALLY hard to get that many contracts, but I’m really excited about just HAVING this goal.

    You may be freelancing or doing whatever on the side for some extra cash, or just working your day job. But having a goal with a deadline helps you focus your drive and get shit done.

    So hop to it and set a goal.

  2. Kevin says:

    I’ve got to admit, I enjoyed this series, Trent. It was very well-done. My only complaint was that you completely avoided any mention of what many readers would consder to be your biggest mistake: Financing a brand-new status-symbol car, instead of paying cash for a practical used car.

    You listed your “Ten Big Mistakes” as:

    1) Student loans as lifestyle support
    2) Career choice based solely on earnings
    3) Lifestyle funded by credit cards
    4) Blaming others for challenges
    5) Worrying about what others think
    6) Children have huge financial ramifications
    7) Stuff without the time to enjoy it
    8) Credit card as emergency fund
    9) Bad influences
    10) Poor goal setting

    I think that since #3 and #8 are the same thing, you should have ditched one and included the Prius on the list.

    But I’ll admit, you kept my attention and I read every article – which I suppose is really all that matters for a blogger, isn’t it. :)

  3. marta says:


    for Trent to include the Prius, he’d have to consider that purchase a mistake in the first place. And he doesn’t, no matter what some of the readers may think of it. ;) Either way, the Prius is paid off now.

  4. Braly says:

    I am personally responsible for both #1 and #10 in particularly. In my case, I think that one lead to another. I think poor goal setting habits as I was coming out of high school lead to ignorance about what students loans are and how hard it would be to pay them back.

    Since I started setting goals for myself (in all walks of life) I have had better success. That is especially true of my finance. Now that I have goals and a solid plan, I am really starting to make a dent in the student loans.

    Great series!

  5. chacha1 says:

    I enjoyed the series too, and I think the Prius was far from a mistake. It’s not a status-symbol car, especially in the Midwest. It’s almost a counterculture vehicle in much of the U.S. It’s not the cheapest car out there, but it’s well made and economical (and fun) to drive, and certainly a higher value for the money than your average BMW/Mercedes/Audi/Lexus/Infiniti.

    If Trent had, after writing on frugality, gone out and purchased a Porsche Cayenne instead of a Honda Pilot, or whatever it was, then I think the car criticism would be on point. But he didn’t.

  6. Kevin says:

    Chacha, even if you don’t agree that the Prius is a status symbol car (and counter-culture status symbols are still status symbols), the point is they have plenty of USED Priuses out there he could have bought, and avoided the depreciation hit. That was just wasted money.

    Also, he financed it and paid interest on a car loan. We know he paid the loan off early, but he still paid some amount of interest on the loan. That’s more wasted money.

    Finally, he sacrificed a great deal of credibility. The whole situation smacked of “do as I say, not as I do.” After writing numerous posts advising readers to save money by paying cash for a practical used car, Trent went against his own advice. Then rather than admitting that he got caught up in the excitement of the Shiny New Thing, he first tried to justify the purchase, then buried the decision, refusing to even mention it since then. As if we’re so stupid that we’ll forget, or just let it slide.

  7. marta says:

    Kevin, Trent said two things regarding the Prius purchase:

    1. that he was earning more money in interest on a CD than he was wasting on the loan interest;

    2. that, while he was doing his research, he found out that the price difference between an used Prius and a new one was negligible.

    Look, I think cars are generally a big waste of money, and Trent’s posts during the Prius debacle smacked of justification. But I think those two points can’t be completely ignored.

  8. Kevin says:


    I can’t find the original post, but I don’t believe he was earning more interest in the CD than he was paying on the loan. I believe his justification was that he didn’t want to drain his emergency fund – meaning he didn’t have enough money set aside specifically for vehicle replacement, and he’d instead have to tap his emergency fund. He didn’t want to sacrifice that liquidity, so instead he financed the car.

    It’s exactly the same as if he’d paid cash for the car, then borrowed $15,000 (or whatever) at 1.9% (or whatever) to be his emergency fund.

    Also, I know he *claimed* the price difference was negligible, but I believe the market is efficient. Nobody’s going to pay $25,000 for a used Prius when new ones are $25,500. Instead, I believe he simply didn’t look very hard, because he wanted the new car. He dug up a bit of anecdotal data that supported his want, and leaned on that to justify his purchase.

  9. 8sml says:

    Personally, I don’t care what Trent does with his own advice. I come for the advice, not to be a spectator on someone else’s life.

  10. Kevin says:


    Would you take diet advice from a fat person?

    Would you take health advice from a smoker?

    Would you take parenting advice from someone who doesn’t have kids?

    Then why would you take finance advice from someone whose actions contradict their own advice?

  11. Items 9 and 10 can fall into every area of our lives, not only finances. I have been reading a book by T.D. Jakes called Maximize The Moment and it talks specifically and directly about these things. I’m not sure if I will ever finish the book since I keep going over and over it. I too have often found myself going in one direction only to have my feet swept out from under me or been told the goal is “too big”. The bad part was that it was friends and family so I was often at odds and unsure. T.D. Jakes talks about how to recognize the signs early, detect their influence, and gives positive strategies for dealing with them. Recommend the book to all goals setters out there! Thanks for the posts Trent. Quality stuff!

    Lastly, I like nice cars and see nothing wrong with purchasing one as long as you apply your best deal tactics. Being frugal doesn’t mean you always have to pick the discount stuff. My goal list has a used red convertable mercedes on it. But, I’m happy walking until I save the money. :)

  12. Johanna says:

    @Kevin: Even if all of that’s true, so what? If he paid more than he had to, but he could afford it and it still left plenty of money for his other goals and things he values, how is that a mistake?

    The only thing I take issue with here is how Trent sometimes doesn’t seem to realize that buying shiny new things for reasons other than having something shiny and new is something that other people do too, not just him.

  13. Harry Che says:


    You made a very good point in “No day should pass without at least a bit of reflection on what you can do today to move towards the goal”. I find that’s probably one of the most important thing you can do for your goal, the rest is just details.

    A simple way that I find works for me is to just write down all my current goals in a journal or some software, everyday. Even though they’re just repeated sentences, just write them down. Once it becomes a habit, you will find yourself automatically thinking about and doing things that are moving you closer to your goals.

  14. 8sml says:


  15. I think that not having concrete goals can be a HUGE mistake! I know that many people establish budgets, pay down debt, and even build up emergency and retirement savings – but they don’t have real goals.

    What I mean is that these things should be the journey to our goals, not the goals themselves. Even lacking self-discipline (which I always consider the biggest financial killer) can be overcome much faster if you set obtainable goals.

    And to the question about taking advice from people who don’t seem to always follow it…of course I would. If someone gives me sound advice, I’m not going to ignore it because they had a time in their life when they didn’t follow it.

  16. Robert says:

    To me Trent lost a lot of credibility when he bought the brand new Prius. The Prius makes no economical sense and that is what I believe this site is all about. There are many other cars he could get for less used. The gas mileage of the Prius is good, but so what? There are tons of better choices. Jetta diesel for example used. It smacks of Trent trying to appear frugal instead of not worrying about what people think and just BEING frugal.

  17. Leah says:

    moving on . . .

    I really like the post. This, more than any other post in this series, hits home for me. I’m financially secure despite not making much, and I’m good with money. What I am bad with is goal setting (and I didn’t realize that until I read this post!). I have a lot of someday dreams. A few years ago, I put several things into motion, accomplished a few dreams, and was really happy (for example, I took an extra job to save up money for a New Zealand trip, and I sold a lot of things to buy a new laptop). Since then, I’ve let life/work/my relationship get in the way of making and achieving my *big* dreams.

    My boyfriend gets back into town tomorrow. I think next week would be a great time for us to talk through both our future goals AND how to start acting on them.

  18. Sarah says:

    @ Kevin-Trent had the money to pay off the car if he chose to, and he also had the money to pay the loan off early-I’d take his advice cause I know I’m not in a postion to make that kinda choice….

    I agree with setting goals, I have a tendency to just got into a holding pattern in my life when I dont set goals.

  19. Goals can be a double edged sword. If you set them (too high) and don’t hit them, you run the risk of getting side tracked and losing focus.

    If you can stay focused on your long term goals, short term goals may not be a necessity

  20. Ratchet says:

    I agree with 8sml; I come here for the advice and don’t care what the person giving the advice does. I am going to make up my own mind whether the advice makes sense to me or not anyway.

    I read a lot of things online, and often do not know much about the person giving their opinion. The advice is either good or it’s not. If a fat person gives me some great advice on losing weight I shouldn’t consider it because they are fat? That doesn’t make any sense. Would the words be more useful if they came out of a healthier person’s mouth? It is the same advice either way.

  21. DreamChaser57 says:

    Only in the personal finance blogosphere could a Pirus spur such a lively and spirited debate. I am a fairly new and infrequent visitor here so I do not recall the Pirus “debacle”. In my mind, money is a tool and frugality is a strategy, a means to get to a desired end, being independently wealthy, retiring in relative comfort, supporting charitable causes, selectively indulging in certain luxuries. I plan on traveling extensively, spending money on lavish hotels and decadent meals -if I can afford it and am able to pay cash, I will make no apologies for that. Not every decision will cut “frugality” muster. I also think an inherent part of self-reflection is the self – Trent’s series was about his mistakes as he perceives them. Credibility is a nuanced thing and is earned in increments – I do not think it is earned in one fell swoop nor decimated in one fell swoop. I do not hold any financial guru on a pedestal -I take the nuggets of what I can from each one and integrate an actionable step into my life. Also, I think advice from people who have made mistakes can be quite compelling. A person lying on their death bed riddled with lung cancer encouraging a family member to never smoke. A person in jail opining about the dangers of living a fast life with an irresponsible crowd to a young person. A person going through a foreclosure encouraging one to remember not to buy too much house. This would be quite sage advice and even more compelling because the fragmented lives that remain after a bad decision are evident.

  22. Brittany says:

    #13 David— Since the “something you can do today to move towards that goal.” If you are still making progress, you aren’t focused. If there’s not a way to make progress, you don’t have a good goal and need to revise.

    Where I teach, use the SMART goals paradigm:


    It’s similar to what Trent is saying, but a little more detailed. I like it.

  23. Mimi says:

    You know, I would take health advice from a fat person, etc. Here’s why:

    Nobody’s perfect. We all make mistakes. I’d rather take advice from someone that’s tried several methods and can say how easy/hard they hard it is and know exactly what they should be doing to get out of that situation.

    I’d much rather take health advice from someone who’s fat than someone who’s skinny and never had to think about their weight but preach “just start running” or “just watch what you eat” like it’s easy, or you’re too dumb to know that.

    So, I wasn’t there for the prius debate but as long as Trent is not feeling guilty for it and has paid off the debt since, who cares? People make mistakes (or not, depending on who’s point of view it is).

    You know, I’m sick and tired of hearing people find fault in others who are trying to do the right thing. My mother in law critized us for having a $100 a month emergency fund! Or for carpooling to the west coat to see my family cuz I haven’t seen them for over a year! (A trip that will cost less than $300, that is saved up for, and that is the very well deserved holidays of someone that works 12 hour days 7 days a week!)

    If he was giving advice and not following ANY of it, then there’s a serious problem. If he’s following 90% of it, then he’s human, no?

  24. Mimi says:

    sorry that was “my mother in law critized us for having a $100 a month ENTERTAINMENT fund!” for 2 people. I think that if it’s not there, that we’re never going to get out of debt cuz we’ll feel too deprived

  25. SAFTM says:

    I like Brittany’s paradigm. Brittany – do you have any materials you can direct us to about the goals program? I would like to talk about it on my site.

    I, too have set some fairly aggressive goals in my life (recently I set a goal to pay off my student loans by the end of 2011 – I have a plan. I have already started selling stuff and working harder to hit that goal. And I’m on my way).

    The goals that I have not achieved have failed at least one of the SMART elements. For example, I tried to get two new accounts by June 2010 in February. I knew that was probably unrealistic, but I tried to get crazy-aggressive. I ended up with one new account. That was great, but I should have set a more realistic goal. If I had set it for one new account I would have been psyched. Because I was too aggressive, I was disappointed – over the same, great result.

  26. If you dont plan, you plan to fail. Plan your goals. Goals should be financial, career, family, spiritual and health. If you are over weigth have goal to reduce fat. If you have children in your busy life have goals to take them out for vacation or weekend, etc likewise have goals for all your important areas of life.
    Goals should be SMART – Specific, Measurable, Accurate, Realistic and Time bound

  27. Hi. This is a great series. Thanks! Setting goals is a big one for me. I set goals when I was in my 20s and hit them by the time I was in my 30s. Although I forgot about them from time to time, they were always in my mind somewhere.

    If you get a chance, check out this LifeSpace.com article on Financial Mastery

    It is all about setting financial goals.

    Thanks again for the great work.

  28. Shahin Khani says:

    my favorite quote in this article is ” had no specific goals, either in the short term or the long term.”
    I think successful people set goals, short term and long term and stick to it. goal setting is what many people strive to do but only few can achieve because it takes motivation and commitment. I wrote a small article on my blog about motivation and commitment. feel free to let me know what you think :)


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