Are you familiar with the term ‘moving the goalposts’? It happens when people change or adjust their targets after they’ve already been established, which is something that happens all the time with finances. Many people set financial goals or deadlines, only to find themselves shifting those targets, often to their detriment. This episode of the Money Wisdom Podcast with Jake Doser, CFP®, CPWA® sheds light on why it’s essential to establish a solid financial plan and stick to it.

The first area where the goalposts often shift is cash. People will have a goal in mind for how much they want to put away, but one of the primary reasons financial goals shift is the desire for flexibility. While it’s important to have flexibility in your financial plan to accommodate life’s unexpected changes, constantly moving your financial targets can lead to instability and uncertainty. It’s important to start with the end in mind by identifying your biggest priorities and retirement objectives upfront.

Another example of this comes with savings goals. It’s so easy to put off saving money in order to pay for other expenses or to have a little fun. But that’s a lack of planning and it will cost you over time because the power of compounding interest cannot be overstated. The earlier you start saving, the more time your money has to grow. The best time to start saving was 20 years ago. The second best time is today.

Another critical aspect discussed is managing investment risks. Many people believe they need to amass a large sum of money before dialing back on risk. However, without a clear plan, it’s easy to fall into the trap of always wanting more. When the market is running well, it’s human behavior to start expecting the gains to never end. Through planning, you’re able to identify your needs so you don’t end up chasing returns that aren’t even needed.

The solution to these issues lies in creating a solid financial plan. Start by determining when you would like to retire and conduct an income analysis to understand what your retirement would look like based on your current savings and potential adjustments. Once your plan is in place, it’s crucial to stick to it while allowing for some flexibility to accommodate life’s changes.

Financial planning is not just a math problem. Of course there is plenty of math involved and the numbers need to work, but you need to be able to follow the rules that you’ve set for yourself or the plan just won’t work. If you’re looking for a good place to start establishing that plan, get a copy of the Money Map by reaching out to us.

Here’s some of what we discuss in this episode:

• What we tell people who set goals for cash but keep changing the amount they set aside.

• Pushing your savings goals back to prioritize other things then you don’t have a plan.

• Greed often drives us to take on more risk when we’ve already established goals to scale back at a certain point.