Regular readers of this column will be aware that I often talk about the importance of goal setting. I believe it is the cornerstone to success as goals provide both direction and motivation.  This is true not only in the context of financial planning but also for life in general.

Many financial goals are so far away that they seem impossible. For example, in today’s market, buying a house for many seems like a bridge too far. Although it is harder than ever to buy your first home, it is possible with proper planning. One of the main tactics we use is to set small stepping stone goals and work towards achieving those.

This process is also effective for life in general, and I have used this exact process on a recent personal journey of mine. Next Sunday, I run the New York Marathon!  This has been a goal over 2 years in the making that initially seemed impossible, much like buying a house.

When I started, I weighed 120kg (probably more) and was exhausted after running a couple laps of the oval – a marathon was a very long way away.  So, I set myself a more achievable goal of running the Sydney Harbour 9km bridge run. I got advice from a coach and put a plan together for that race.

After completing that, I engaged a coach. Together, we set ever increasing goals and developed training plans to hit each one of these milestones.

The short-term goals seemed achievable and, as I ticked them off, I felt a sense of accomplishment and remained motivated. Step by step I was closer to achieving my dream of completing the once impossible goal of the New York Marathon.  Next week it will be a reality.

Buying your first home, clearing your debt or saving for retirement, at the outset seems impossible and so far away. So, we start with more achievable goals.  It may begin with establishing a budget and sticking to it. By paying off the credit card, all of a sudden you have more disposable income. You start directing that extra cash flow to a savings plan and before too long you have built up a lump sum. Step by step you get closer to your goal.

The role of the Financial Planner, much like my running coach, is to work with you to identify not only the end goal but the stepping stone goals along the way.  They can then help you put a plan in place to achieve them.