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How a Master List Can Help You Prioritize Your Goals


Published December 24, 2021 • 3 Min Read

This article was originally published in RBC Direct Investing’s Inspired Investor magazine.

Let’s not sugar-coat it: Setting financial goals is hard. We all have multiple, often competing, goals for the available resources we have. Some of our goals are about wanting to avoid things, like not being able to pay our bills, while others are about gaining things, like as much wealth as possible. Some require us to avoid risk, others to embrace it. This often means difficult trade-offs are required.

To make things even more challenging, behavioural biases often come into play. Some studies have shown that when asked to recall our top three goals, we’re likely to choose those that jump to mind first, which aren’t necessarily the most important to us. A simple nudge, like using a master list, can help us prioritize goals that truly have meaning and motivate us.

What is a master list?

Quite simply, a master list is just as it sounds. It’s a list of all the “big things” that you need (or want) to do at some point, all written down together and kept in one place. In this case, it has to do with our money aspirations. When it comes to goal setting, a master list can help us:

  • Identify our financial goals. We often reflexively choose financial goals we hear about most often, but which may not truly be our own goals. Writing them down can give us more clarity.

  • Make our goals more specific and motivating. The statement “I want to be comfortable in retirement” is vague. Would a “comfortable” retirement mean replacing 50 per cent our pre-retirement income or 100 per cent of it?

  • Gain a greater emotional connection to our goals. Emotions play a large role in reaching our financial goals (for example: excitement might make us overly optimistic, while sadness may have the opposite effect; anger may lead to rash decisions; anxiety could cloud our judgement). Being emotionally honest and motivated to reach our goals helps us to stay on track.

What kinds of goals should I consider?

Goals are personal, of course, but sometimes a list of ideas can help get us started:

  • home ownership

  • debt reduction

  • retirement savings

  • savings for a rainy day

  • savings for a big “self-rewarding” purchase

  • just want to keep my head above water

  • home renovations

  • children’s education

  • supporting aging parents

Other ideas might include vacation, leaving an inheritance or supporting charitable causes.

Once you’ve got your own personalized master list, you can start narrowing things down or prioritizing to focus in on what’s most important to you.

According to one investment research study, a goals-based financial plan could add around 15 per cent to a hypothetical family’s wealth.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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