Goals are the measurement of the vague things we are chasing in our lives. The goal of success can be boiled down to a certain amount of money you earn a year. The goal of being healthier can be measured by your weight or the amount of miles you can run without stopping.  

Habits are the things that will influence your ability to achieve your goals. The good habits help you reach your goals and the bad habits will hinder you from the sweet, sweet glory of achievement. Ultimately, habits influence our automatic behavior and our automatic behavior influences our day-to-day life.

The difference between habits and goals is the action required for each. For example, you could have the goal of saving $500/month or you could have the habit of saving 5% of everything you earn. Creating a budget for the year is a goal, but implementing a system for sticking to it is a habit.

I’ve watched myself set goals and achieve them. I’ve watched myself set goals, grow exhausted, fight a cruel internal dialogue and ultimately fail at what I’d set out to do. At the same time I’ve watched myself build habits without a focus on goals and it’s amazing what I can achieve when my internal dialogue stops and my habits just kick in.

And for the last couple of years, I've joked that my goal is to have no goals, but the more I spend time watching the clouds and thinking about my life, the more I am compelled to quit having goals. 
 

The Problem with Goals

Goals are flawed to the point that they undermine what they set out to achieve. Goals rely on factors which are outside of your control, they have an endpoint and they require you to try to use your willpower.

There are so many factors outside of your control that impact your finances. The new tax code, a disruption in your supply chain or unexpectedly getting sick are all things that can impact whether or not you achieve your goals.

Goals have and endpoint which makes it easy to revert back to bad habits. Some people reach their savings goal, but spend it all a few months after.

Goals rely on willpower, which cannot be trusted in the long run. Willpower isn’t an automatic behavior, it’s like using a muscle. Overtime if that muscle is working hard, it can get tired. For example, trying to save money by spending less requires willpower and discipline. But automatically having a portion of your income going into savings is a habit that doesn’t require any willpower.

Some studies even cite that goals can cause risky behavior. Some people get so focused on achieving the goal that become blind to anything that appears unrelated to achieving said goal. There can be an overemphasis on short-term thinking or unethical behavior as a result of trying to reach an unrealistic goal.

The Power of Habits

Habits make things that were once difficult easy because habits are automatic.

Habits are easy to complete. You’re no longer beholden to your crappy willpower because habits literally rewire your brain. Your brain changes so the habit becomes easier to enact the than not doing so. You don’t have a mental battle about whether or not you’ll brush your teeth in the morning because it’s a habit that’s so deeply ingrained.

Habits can last for life. Our lives are structured around our habits and once a habit is ingrained, it can last for a lifetime. 

Habits can compound. A single habit can have a deeper and wider impact on our lives. Creating a habit in one area of your life can have an impact on behavior in other areas of your life. For example, someone who starts exercising might also eat less processed junk food. If you start automatically saving money in an emergency fund, you might find yourself making better choices when you're shopping.

Sometimes habits naturally allow you achieve more than your goals because of the automatic nature of them. It’s possible to still achieve results by ignoring goals and focusing on habits and systems. For example, a basketball team can still win a championship even if their focus lies in doing their best at each practice and each game. I've never had a goal with my meditation practice and now I'm going on year six of consistently meditating. When I shifted my focus on habitually adding value to my client's lives and businesses each month, I made more money than when I was focused on an income goal alone.
 

Fall in Love with Systems

Goals can be a source of joy when you are able to achieve them. Like so many things, they work until they don’t work anymore. And when that happens they can be a source of frustration. In order to continue achieving your goals, you’ll need to constantly seek motivation and inspiration. You’ll constantly be drawing from the ever-depleting well of self-discipline and willpower. You’ll be exhausted over the long haul.

The self-preservationist way around this is to create systems in your life, especially your financial life, that will remove your chatter-filled mind from the driver’s seat. Create systems for savings and fun spending so that instead of wasting time and energy asking yourself if you can afford this new thing you want but you don’t need, you already know that you’ve set aside money for savings, taxes and fun.

As you think about what it is you seek in your financial life, invest the time to understand what are the positive habits you need to form instead of becoming singularly focused on a specific goal.