Why we Fail… and what to do about it

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We all have goals. Our clients have goals. Why do we give up on them when it gets tough? Let’s talk about why we fail and how we can plan for success.

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"Everyone has a plan until they get punched in the mouth."

—Mike Tyson

Who better to feature in this week’s newsletter than Mike Tyson? His quote perfectly encapsulates what happens when our best-laid plans meet unexpected challenges. Tyson reportedly said this in response to a question about whether he was worried about an opponent’s strategy. It’s a reminder that plans can quickly unravel when faced with real adversity.

So, let me hit you with some insights I hope you find valuable—no cheap shots, I promise!

As we all know, when it gets difficult, many people disengage or simply give-up. Around 80% of New Year's resolutions, which frequently include financial and weight loss goals, fail by the second week of February. Financially, a survey by U.S. Bank found that only 41% of Americans have a budget, and a staggering 70% of those who do not have one fail to meet their financial goals. In the realm of weight loss, less than 1% of obese individuals successfully achieve long-term weight loss, highlighting the significant challenges faced in both personal finance and health-related goals.

Why do we fail?

Well, there are several psychological, emotional, and situational reasons, some are intuitive, and others may be a big surprising…

Self-Doubt

Fear of failure can be paralyzing. When people are too afraid of failing, they may abandon their goals rather than risk failing. This is often tied to a fixed mindset, where individuals believe their abilities are unchangeable, and any failure is a reflection of their inherent worth.

Perceived Lack of Progress

In a world where instant gratification reigns supreme, not seeing immediate progress can sap motivation. This impatience creates a sense of futility, leading people to believe that continuing is pointless.

Burnout

Prolonged stress and effort without sufficient emotional support can lead to burnout. When emotionally drained, people are more likely to give up on their goals, seeing the emotional cost of continuing as too high.

Lack of Support

The absence of a supportive social network can increase the likelihood of giving up. Without encouragement or guidance, individuals may feel isolated in their struggles, making it harder to persevere.

Unrealistic Expectations

Setting the bar too high can lead to disappointment when reality doesn’t measure up. This disillusionment can erode motivation and increase the temptation to quit.

Learned Helplessness

People who have experienced repeated failures may develop a sense of learned helplessness, believing that their efforts will always end in failure, making them more prone to giving up.

There are no obstacles in Your Path...that’s just the make-up of your path!

I know, I know—it sounds like something you’d see on a motivational poster next to a kitten hanging from a tree branch. I hate those (the posters, not kittens). But cliché as it is, it’s true. Whatever one confronts on their journey IS the journey. Identifying and planning for potential challenges can make a world of difference. People who identify potential obstacles and plan how to overcome them are far more likely to succeed than those who don’t engage in this kind of planning.

One notable study by Peter Gollwitzer and his colleagues developed the concept of "implementation intentions." Their research found that people who form specific plans about when, where, and how they will act to achieve their goals are more likely to follow through. In fact, Gollwitzer's research shows that forming these intentions can double or even triple the likelihood of success, with rates increasing to around 60-70%.

?So, What Does That Look Like in Practice?

Here are some specific actions a financial planner can take to help clients navigate these obstacles. There are all kinds of communication techniques we do in coaching advisors that are way longer than a newsletter allows, but this will get you started.

1. Build Confidence through Education: Financial planners can address clients' fear of failure by providing clear information about financial strategies. This boosts clients' confidence and reduces self-doubt. Research shows that financial literacy is closely linked to increased confidence and reduced anxiety about financial decisions.

“To reach this goal, what are 2-3 challenges we might see along the way? How can we plan for them now?”

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2. Reframe Setbacks: Planners can help clients see failures as learning opportunities rather than personal shortcomings. By fostering a growth mindset, where challenges are viewed as part of the learning process, clients become more resilient and less fearful of failure.

“What can we do differently next time. This goal is going to be big for you so let’s learn from what just happened and adjust. You got this.”

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3. Set Short-Term Milestones—and Celebrate Victories! Break long-term goals into smaller, more manageable milestones. Celebrate these incremental successes to help clients see progress and maintain motivation. Research shows that perceived progress boosts motivation and persistence.

“We just took our first step towards saving for your children’s education. This has been weighing on you all for years and now you are moving towards addressing it!”

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4. Find (Reasonable) Excuses to Engage: Regular check-ins to review and adjust the financial plan help maintain momentum. Use these sessions to highlight achievements and adjust strategies, keeping clients motivated.

“I am sending a quick note to see how you are doing...”

5. Set Realistic, Achievable Goals: Work with clients to set realistic, achievable goals using data-driven projections and clear timelines. This helps prevent disillusionment and keeps clients engaged by aligning their expectations with what’s realistically achievable.

6. Combat Learned Helplessness: Help clients overcome learned helplessness by focusing on small, positive actions that rebuild confidence. Start with easy-to-achieve financial tasks that yield quick wins, gradually leading to more complex goals. This step-by-step approach effectively restores a sense of control and competence, building financial self-efficacy.

7. Reflect on Past Successes: Encourage clients to reflect on past successes, even small ones, to counteract the negative impact of previous failures. This solutions-based approach builds a narrative of resilience and capability.

Navigating short or long-term goals requires a steady hand and a clear vision of both success as well as the challenges that can come along the way. As advisors, your guidance is the compass that keeps clients on track, even when the waves get rough. By reinforcing their commitment to the journey, you're not just managing portfolios—you're building financial resilience.

Here's hoping you navigated through this maze of clichés and groan-worthy puns to reach the end. If you did, congratulations on surviving the… “pun-ishing” journey!

Visit me at www.CharlesChaffin.com for more or visit us to learn about our advisor programs, workshops, and consulting at www.PsychologyofFinancialPlanning.com.

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Citations

?Baumeister, R. F., & Scher, S. J. (1988). Self-defeating behavior patterns among normal individuals: Review and analysis of common self-destructive tendencies. Psychological Bulletin, 104(1), 3-22.

Devaney, E. (2018). 69% of Americans have less than $1,000 in savings. MarketWatch. https://www.marketwatch.com

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Dweck, C. S. (2006). Mindset: The new psychology of success. Random House.

Gollwitzer, P. M. (1999). Implementation intentions: Strong effects of simple plans. American Psychologist, 54(7), 493-503.

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Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation. American Psychologist, 57(9), 705-717.

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Norcross, J. C., & Vangarelli, D. J. (1989). The resolution solution: Longitudinal examination of New Year’s change attempts. Journal of Substance Abuse, 1(2), 127-134.

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Oettingen, G., & Mayer, D. (2002). The motivating function of thinking about the future: Expectations versus fantasies. Journal of Personality and Social Psychology, 83(5), 1198-1212.

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Schwarzer, R., & Knoll, N. (2003). Positive coping: Mastering demands and searching for meaning. Positive Psychological Assessment: A Handbook of Models and Measures, 393-409.

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Sirois, F. M., & Pychyl, T. A. (2013). Procrastination and the priority of short-term mood regulation: Consequences for future self. Social and Personality Psychology Compass, 7(2), 115-127.

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Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. Penguin Books.

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Tugade, M. M., & Fredrickson, B. L. (2004). Resilient individuals use positive emotions to bounce back from negative emotional experiences. Journal of Personality and Social Psychology, 86(2), 320-333.

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Wing, R. R., & Phelan, S. (2005). Long-term weight loss maintenance. The American Journal of Clinical Nutrition, 82(1), 222S-225S.

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Yeager, D. S., & Dweck, C. S. (2012). Mindsets that promote resilience: When students believe that personal characteristics can be developed. _Educational