Goal setting is so much more than picking some arbitrary dollar amount goal with clients. If done wrong, it can create a sense of failure in our clients and be potentially damaging. But when done right, it has the ability to truly boost a client’s momentum and create a new level of excitement when it comes to their money!

This concept is typically introduced early in the client journey, as found in our 90-day coaching program Toolkit #2. It really helps a client to shift from setting goals that don’t serve them well, or maybe they’re not even setting goals and are just winging things, to learning exactly what works for them and what doesn’t so they can establish a repeatable process for setting and achieving their goals. We want to help clients gain awareness around how goal setting will work best for them. We also want to help clients strengthen their trust and belief when it comes to their goals. This process allows us to do that!

The Three Phases of Goal Setting

The three phases of goal setting are the education phase, the application phase and the commitment phase. (To hear more about this particular coaching framework, check out episode 17 of this podcast.)

One thing I’ve observed over the years of coaching is that a lot of people do not set goals. Maybe they did at some point, but when it comes to money especially, they have set goals so many times only to not achieve them that at some point they just sort of gave up. They don’t really see it as a worthwhile process.

Education Phase: Building Awareness

Imagine coaching a client and going straight into action mode around goals when the client is actually thinking, “This is stupid. I’ve set goals in the past and it didn’t do any good.”

In other words, they’re not really bought into the process you’re trying to coach them on and you’re not addressing that first. Your first goal is to discover where this client’s starting point is. Identifying a client’s starting point is always the key objective of the education phase.

This is a great time to simply have a conversation about goal setting in general. You can ask questions like:

What do you think of setting goals? Is this something you do often? Something you never do? What do you think of it?
What’s an area of your life where you set a goal and achieved it?
Are there times where you set a goal and it didn’t work or you didn’t achieve it?
How do you feel if you set a goal but don’t hit it?

Then I talk with them about what our mind does when we set goals. I talk with them about the potential stumbles that occur as a result of what our subconscious minds sometimes do once we set a goal.

I also share various examples of goals and how there’s a variety of ways to set a goal. Some types of goals that your client may find more or less motivating are:

  • Habit goal (update budget X times per week)
  • Performance goal (How much I’ll put into savings each month)
  • Outcome goal (How much I’ll have in savings at the end of the year)

All of this is me learning what the client thinks but it’s also me educating the client before having them set a goal. It’s taking the time to point out that goal setting is about discovering what will work best for them and that there’s not one right way to do it. We talk about how goal setting is more than just a thing you do. Goal setting is a mindset, it’s an energy. It’s wanting something, owning it, deciding and committing to it, and then setting up a plan to achieve it.

Application Phase: Goal Visualization

Next, we move on to the application phase. I start by asking them about other ways they want to enhance their life: “What are some things you’d like to accomplish in the next year or so?” You can also have them answer “It would be nice if… what?” We write those things down and I’ll usually ask them to tell me more about them or why these are important to them. Again, just slowing down the coaching conversation.

If they can’t come up with anything or they seem stuck, which is normal for some people if they haven’t set and achieved goals in the past, I have a number of questions, examples or stories that can be helpful here. Most often when we’ve teed up the conversation around goal setting in the way I’ve outlined, clients feel more free to share goals, dreams or desires they have for their life. But once in a great while you might have that client that really struggles with setting a goal.

Then we might be nearing the end of the session so I tell the client that between now and their next session, I want them to imagine themselves achieving those goals. How would it feel? What would be different? Why is it so important? How is their life impacted as a result of hitting this goal? I simply invite them to do that – they can do it while in the shower, while driving, while sitting down with a journal, while out walking… just imagine it.

In their next session I’ll ask them to share with me how that went and what they imagined. Then I’ll ask them, out of the ones you imagined, which one felt the easiest to imagine? Which one felt the most urgent, the most important? I also want to know why but sometimes a client will include that when they answer and other times after they tell me which goal is most important to them, I will ask them why that is. (I’m looking for external drivers here – because it’s what they feel they should do, for example.)

Then I ask which one gets them the most excited? (I have found that a client’s excitement for the goal is a beautiful driver. They’re more likely to feel successful with this kind of goal so we’ll usually start with that one.)

From there, I tell them I want to see how specific we can make the goal. Up until this point, I use the word “goal” loosely. Their goal might be something like “I want to buy a house.” Now we need to get even more clear and specific with the goal, I just don’t START there.

Here’s my goal for this section. When the client says “I want to buy a house,” in their mind they are picturing something. That vision might be crystal clear and very detailed, or it might not be, but I want to pull that picture out of them and I want to help bring it into more focus if possible too. And this is where asking questions is really powerful- one of the single best traits we can have as a coach.

  • This house you want to buy: What does it look like? Is it a condo, house with lots of land, or a smaller home? Where is it? When you imagine yourself in the house, what are you doing? How are you feeling?
  • Any idea how much a home like that would cost?
  • When is the ideal time for you to have this house?

We tie a loose dollar amount to it, a month or timeframe, a specific feeling, a result. Again, there are a number of different types of goals so based on the type, this part of the conversation can flow in a number of ways. There can and will be a bunch of unknowns possibly depending on how long the client has had the goal and if they’re already researched it. The purpose of this section of the conversation is simply to bring the goal into greater focus and reality.

Then I talk about the mindset of picking one goal to focus on, what this signals to their mind. I talk about how dividing our energy, our focus and also our money can create certain setbacks. I tell them how “Divide and Conquer” doesn’t work when it comes to our money and why. This is where the mindset of goal-setting and getting the client’s buy-in is happening again. I’m both helping them to visualize the actual goal or outcome, but I’m weaving in discussions around the process of goal setting so they can begin to also visualize themselves navigating that process.

One of the observations I have is that clients tend to set too strict or overly ambitious goals. And by overly ambitious I simply mean a goal that would require a level of commitment or effort that isn’t actually worth it to the client. Where they’d have to give up something that they have also said is non-negotiable to them.

Instead, we explore the concept of good-better-best goals. This is the idea of setting tiers to your goals so they aren’t just pass or fail. It can simultaneously remove any pressure some people feel when setting goals while also establishing even more ambitious goals. I like to explore the idea of a good-better-best goal:

  • Good: Absolutely should happen. Something would have to go really wrong in order to not hit this. You can see this clearly. As long as things stay on track with what you’re already doing, there’s very little that should derail you enough that this goal wouldn’t be achieved. Feels very obtainable. Realistic. Feels “easy” to commit to.
  • Better: A few things would have to work in my favor or I may need to boost my efforts a bit. It’s not outside the realm of possibility, but I’m not necessarily doing it right now. It’s going to require some changes, new habits/behaviors. I’m going to show up for myself, I’m going to really show a new level of commitment for this. This is a bit of a stretch but isn’t too extreme either. It’s a possibility.
  • Best: I have no idea how this will happen. Something miraculous would have to occur to hit this. I don’t know how it’s possible, this feels totally bonkers when you establish it. You have zero clue how this will actually happen.

So we take the client’s goal and in this phase, we execute the good-better-best strategy of goal-setting.

Once we’ve done that we move into planning & execution of the goal. Keep in mind we’re still in the Application phase of this concept. The goal of this phase is to help the client really SEE what it would look like to make that goal happen.

  • How do they need to be showing up?
  • What targets do they need to hit?
  • What does the PROCESS of achieving that goal look and feel like?
  • What would I have to do in order to accomplish all of these goals? What strategies will help me reach my goals in 90 days?
  • What milestones can I set to keep myself on target?
  • What/who can support me?
  • What do I need to avoid? What could try to derail me?

We essentially explore what it looks like once they’ve committed to the goal- what habits are they signing up for – updating their budget weekly, communicating with a spouse, eating at home 5x per week, reviewing subscriptions, working an extra shift every other weekend.

We talk about what it looks like to “win the week” – another coaching concept that creates sustainable habits. We explore which obstacles might arise and how they plan to combat those or be prepared for them because obstacles WILL arise.

Now, every so often the Good-Better-Best goals are adjusted a bit here. Sometimes we boost them and sometimes the client realizes the goal isn’t possible based on the level of effort they have to put in. And that’s okay.

At this point, it’s important to talk about how they will celebrate or reward themselves. Helping clients celebrate their journey, their progress, their growth & also their achievements will be the topic of next week’s episode because I whole-heartedly believe we need more of it in the world of money and in life in general! So next week, the conversation around celebrating our wins would go here.

Depending on the complexity of the goal, this planning and execution phase, as you can imagine, is likely a couple of sessions.

Commitment Phase: Ensuring Progress

In this section it’s really all about answering the questions “How will I keep this goal front of mind?” so my mind can continuously work toward helping me achieve this goal.

Are we creating a visual?
When will I check in with this goal next?
How am I revisiting this periodically?

This comes back to the earlier phase where I talk about what happens in our mind when we set goals and why this step is important: Keeping our goal and commitment front of mind. So I’m really bringing the entire conversation full circle now.

Another commitment I invite the client to make is that if ever they start to feel misaligned or disconnected from their goals, that they’ll revisit this exercise or they’ll share with me how they’re feeling? Because listen, we can change our mind you guys.

We write down all their goals, the specifics and their commitments in their action plan.
Summarize. Or ask them to summarize.

My ultimate goal is ____. My Good-Better-Best goals are _____. In order to make this happen, I will _____, _____, ______. And in order to keep this front of mind, I will ______.

Then I wrap everything up by asking the client to share with me how they’re feeling.

  • Did they find it helpful, eye-opening, dreadful?
  • Did they gain any new awareness or clarity?
  • Are there any observations they’re having that they’d like to share with me?

All of that is my way of learning more about the client so I can continue to be a great coach for them. I also want them to know their feedback is important to me.

When it comes to helping our clients set goals with their money, I hope this encourages you to lean in to the process of goal setting a bit more so you can lead your client through a journey of self reflection and discovery that gives them the skill of goal setting, which is far more powerful than having them set one financial goal and considering our job done.