Creating Financial Checkpoints: A Key to Helping You Reach Your Goals

By Adam Vega, Vice President, Goldman Sachs Personal Financial Management

Many people learned at a young age about the importance of setting goals. You’ve probably heard it from your parents, teachers, and these days, your financial advisor.

When you think about the financial future you want, it can be easy to come up with a big, ambitious goal right out of the gate.

On the one hand, it’s good to dream big. On the other, aggressive goals can be intimidating and become seemingly unattainable when you run into a temporary setback.

And that’s understandable. Many people tend to fixate on the end goal. When that seems out of reach, you might be tempted to abandon your goals altogether.

So what can you do to stay motivated and stay the course?

To attain any goal, whether it’s financial or not, you’ll need a series of checkpoints.

Big financial goals are rarely achieved overnight. By creating checkpoints along the way, you can work towards your goal systematically. It can help you track your progress and identify necessary course corrections. You certainly want to know as soon as possible if things aren’t going according to plan.

Here are some tips on how to create strategic checkpoints to help keep you moving towards your financial goals, big or small.

Setting up financial checkpoints for your goals

One key to achieving a large goal is to create smaller goals that can help you get to the finish line. These smaller goals are your checkpoints.

The idea of using checkpoints can be applied to almost any big or long-term goal, whether it’s wealth-building or weight loss. You’re essentially breaking up your end goal into more manageable steps. It’s often simpler to work through smaller goals gradually over time, using them as stepping stones towards your larger goal (which could take years to achieve).

No matter what your financial goal – I recommend reviewing your finances and progress every January to see where you stand. Go ahead and add it to your calendars now as a reminder – I’ll wait.

For shorter-term goals, I typically set up checkpoints every 90 days (or each quarter). For more aggressive goals, you can shorten the checkpoint periods – maybe every 4 weeks or any interval that makes sense for you.

The importance of rewarding yourself when you reach a checkpoint

Rewarding yourself for your accomplishments along the way can be critical. Because the feeling of success can help motivate you to keep going.

I see this with wealth builders. They hit a net-worth milestone and feel more motivated to create more wealth to reach their next goal. This idea also applies to debt reduction. When you pay off one loan, you become even more motivated to pay off the next loan.

We see this kind of motivation even in nature with a nest egg. (Yes, a literal nest egg.) A tactic that farmers have used to increase egg production is to place a real (sometimes ceramic egg) in a nest to encourage hens to lay more eggs. The idea is that by seeing the egg (the progress), the hens would be motivated to produce more eggs.

All this is to say: Feel free to celebrate the checkpoints or milestones as you reach them. Not only on your own – get your family and friends involved. A great way to stay motivated is to let those around you know what you’re up to and about your progress.

Be kind to yourself

While financial checkpoints can help increase your likelihood of reaching your goals, they can also help reveal areas where you might be getting off track or not heading in the right direction. Remember, success isn’t always linear or guaranteed. So don’t be too hard on yourself if you run into a setback.