By Ken Power on Nov 5, 2018

By Ken Power, November 2018

Will I be able to retire at 60 or 65, or will I have to work forever?  How can I help pay for my children’s university tuition, so they don’t end up saddled with student loan debt?  Why is it we start every year with credit card debts due to our spending over the holidays? Should I use a TFSA or a RRSP for my investments? Do I really need a Will?  I just changed jobs and my previous employer sent me paperwork regarding my options for my retirement benefits; how do I decide what is the best option?

For a long-time now you have experienced stress and worry when considering questions such as these. But you have decided enough is enough!  You are going to take action, get your financial house in-order, and improve your financial literacy.  You have decided to engage a Certified Financial Planner (CFP®) to help you put in place a comprehensive financial plan.

Your financial plan must begin with your financial goals. Lewis Carroll stated, “if you don’t know where you are going, any road will get you there.  Life Coaches, MBA Programs, along with hundreds of books all proclaim Goal Setting as a Key to Success.

Why is it so important to have written goals?

Because our brains tell us so.

In the chaotic times we may feel as if were adrift in the world.  We are working hard, but often we don’t seem to be getting anywhere worthwhile. It’s been said that “in the absence of clearly defined goals, we become strangely loyal to performing daily acts of trivia”. Trivia defined as; details, considerations, or pieces of information of little importance or value.  Your financial habits and are defiantly not trivia.  Your financial habits need to align with your financial goals.

Neuroscience has taught us that establishing goals has a profound impact on our brains.  When we establish a goal, our brain absorbs this desired outcome into our self-image.  You see our brains can’t tell the difference between a vividly imagined experience and reality.  This is why successful athletes use visualization to improve performance.  Visualization can enhance skills through repetition similar to physical practice.  Visualization can improve self-confidence as the brain incorporates success into the athlete’s self-image.

When you set financial goals, your brain believes the goal is an essential part of who you are.  If you establish a goal to become free of consumer debt your brain will incorporate being free of consumer debt into your self-image.  Therefore, until you actually achieve your goal, there is tension.   To resolve this tension, you need to work toward accomplishing the goal.  In other words, establishing the goal to become free of consumer debt sets up conditions that drives you to achieving the goal.

As you make progress toward achieving your goals, Dopamine is released into your brain. Dopamine is a neurotransmitter that creates a sensation of pleasure when the brain is stimulated by achievement.  At the same time when Dopamine is shut off it can cause anxiety.  Therefore, if you set goals correctly your brain will reward effort toward achieving the goal by releasing Dopamine; focusing on your goals can feel good, encouraging you to spend even more time working to achieve them.

How do you set your financial goals correctly?

Align your financial goals with your life goals AND set SMART Financial Goals.

Alignment: In Stephen Covey’s The 7 Habits of Highly Effective People, the second habit is “Begin With the End in Mind”.  To help us understand this Habit Covey suggest a thought experiment. We are to imagine attending our own funeral. Visualize the funeral home, the casket, the people present, the flowers. Hear the music playing.  Then an individual steps up to deliver the eulogy.  He begins to speak….. 

What do you hear?  What do you want him/her to say?  How do you want your life to be summarized?

Habit 2 is based on your ability to envision in your mind what you cannot at present see with your eyes.  Covey says that all important things are created twice.  The first creation is in your mind; a mental blue print showing clearly what it is you want to create.  A great way to incorporate this Habit into your life is to create a personal mission statement.  Your personal mission statement will be a blue print for what you want to your life to be about, the future you desire, the legacy you want to leave, the type of person you want to be.

Money is a tool to help you realize your life’s purpose.  Therefore, when creating a financial plan, you want your financial goals to be aligned with your life goals. In “The Road to Character” David Brooks discuss two types of virtues; resume virtues and eulogy virtues.

The résumé virtues are the ones you list on your résumé, the skills that you bring to the job market and that contribute to external success. The eulogy virtues are deeper. They’re the virtues that get talked about at your funeral, the ones that exist at the core of your being—whether you are kind, brave, honest or faithful; what kind of relationships you formed.”

At your funeral do you want the eulogist to talk about how much money you made, how successful your investments were or the size of your estate?  Success in your financial life should be directed and focused on your eulogy virtues, your personal mission statement.

SMART Financial Goals:

SMART goals:

  1. are powerfully motivating
  2. yield more satisfaction from the sense of achievement
  3. provide focus
  4. align our actions too what is most important to us


Specific goals have a much greater chance of being accomplished.


A goal is only useful if it can be measured.


Achievable goals are Action Orientated! Stephen Covey writes that all important things are created twice; first in your mind and then through your actions.  Your financial plan will outline the actions and habits that will be required to achieve your goals.


Your Financial Goals should be aligned with your life goals. When you do this the financial habits required to achieve your financial goals will be in alignment with your life goals.  When managing your cash flow, you won’t be making sacrifices to achieve your goals; you will be aligning your spending, saving and investing with what is most important to you in your life.


Goals should have defined starting points and end points. For financial goals time is critical. Investing decisions are heavily impacted by time.

If you are to achieve Financial Peace of Mind you must have SMART Financial Goals that are aligned with your life goals. Of course, goals alone are not enough. You also need a Comprehensive Financial Plan that provides a road map to achieve your goals.

“A Plan without a Goal is a Dream: A Goal without a Plan is a Nightmare” - unknown