Despite a rough economy, setting financial goals a game-changer for some consumers

After facing challenging economic times in 2022, many consumers are experiencing financial strain. But those who had specific financial goals last year were two to three times more likely to say that various aspects of their personal finances improved.

This is according to Lincoln Financial Group’s Consumer Sentiment Tracker, aimed at gauging consumer sentiment on a variety of financial topics. In addition to seeing an improvement in their finances, those consumers who had developed financial goals were three times more likely than the others to say they did a great job on their overall financial wellness last year and twice as likely to be optimistic about their finances this year, the survey said.

“Lincoln’s research underscores the importance of taking a definitive approach,” said Ed Walters, senior vice president, Lincoln Financial Network, the wealth management arm of Lincoln Financial Group. “While financial goals don’t need to be complicated, you should be able to easily track and monitor your progress. Consumers’ wallets are stretched thin with many competing financial priorities, so now is a great time to get back to the basics.”

Helping clients set goals

Since goal-setting appears to play such a major role in enhancing the financial situation of consumers, it comes as no surprise that quite a few top financial advisors focus on this critical task as they work with their clients to develop financial plans that help them secure a sound financial future.

Take the case of MDRT member Brad Brain with Brad Brain Financial Inc. “We approach every client engagement with a financial-planning mindset, “ Brain said, as he explained the approach he uses with clients. “We want to clearly define the client’s goals first. Then we can determine what it will take to move the client from where they are now to where they want to be.”

Scarcity vs. abundance

For example, Brain established a plan that gave a client the confidence that he was going to be OK financially upon his retirement.  Although the client’s financial resources grew to a point at which he will never have to worry about money again, the way in which he thought about money did not evolve, Brain said. Instead, he was stuck with a financial outlook that was based on scarcity when, in reality, he had the financial means to live a life of abundance.

The plan that Brain developed for the client was to make sure that they could do what they wanted financially, but the unexpected side benefit was what Brain did took all the financial stress away, and financial stress is a big problem in personal relationships, he said.

“So by giving them financial peace, we actually accomplished much more--we gave them emotional peace, happiness, and a renewed commitment to what is truly important to them,” he said. “By focusing on the financial planning process, not only were we able to achieve all of the client’s objectives, we also gave them peace. For this, I have earned not only earned my fee, but also the client’s enduring gratitude,” he added.

Without goals, it is easy for people to take a casino-like approach to money, Brain explained.  But he does not look at money as a game. Instead, he looks at it “as a tool to help us achieve our Great Goals in life. And, until you define what those Great Goals are, you are leaving your success to random decisions, with fingers crossed that things will somehow turn out OK,” he said.

Data for the Consumer Sentiment Tracker 2022 was collected in March, April, May, June, July, September, October, and November of 2022 using the Qualtrics survey platform. Responses were collected from a total of 1,000+ U.S. adults each month. The sample included quotas to be representative of the total U.S. adult population.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at amseka@INNfeedback.com. 

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