A number of years ago, Dilbert cartoon strip creator Scott Adams penned a Wall Street Journal article that sparked some debate about the value of goal-setting. He didn’t pull any punches, telling readers, “Goals are for losers.”

Instead of goals, Adams recommended focusing on systems:

Writing a best-selling book is a goal, whereas practicing your writing every day for an hour is a system. Getting your boss's job is a goal, whereas continuously improving your skills and knowledge is a system. The problem with goals, in my opinion, is that they can be demotivating because progress is often imperceptibly slow. But if you employ a system, you'll have a sense of achievement every day.

In his book, Atomic Habits, James Clear agrees with Adams. As a long-time goal-setter, he said:

I began to realize that my results had very little to do with the goals I set and nearly everything to do with the systems I followed…. Now for the interesting question: If you completely ignored your goals and focused only on your systems, would you still succeed? For example, if you were a basketball coach and ignored your goal to win a championship and focused only on what your team does at practice each day, would you still get results? I think you would…. If you want better results, then forget about setting goals. Focus on your systems instead.

No question that by focusing only on systems you would still get results. However, with all due respect to Adams and Clear, maybe this isn’t an either/or scenario. Maybe the best way to think about this is that goals are helpful in identifying what you want to accomplish and systems are what’s needed to get there. Importantly, goals also give you the motivation to stick with the system.

When I teach biblical money management classes and encourage people to use a budget, I use a simple graphic to emphasize the importance of both goals and plans (systems).

The ideal is to be in the top left quadrant where you have goals and a plan. That's when you're truly managing money.

If you’re in the lower left quadrant, you have a money management plan or system but no goals, you may be obsessing. You’re sweating the details of hitting all of the numbers in your plan, and you’re probably getting good results, such as living within your income. For some, that may be reward enough. But for me, and I suspect at least a few others, we need a reason to do the work. We need to know that if we hit the numbers, we’ll be able to take a vacation, help our kids pay for college, or give generously to a ministry God has put on our heart.

Plus, goals tend to change over time, and different goals require different systems. Right now, we have a goal of being able to provide a certain amount of money toward each of our children’s college expenses and we’re using a system of making monthly contributions to 529 plan accounts to pursue those goals. But once they complete college, we’ll have different goals for that money and we’ll use a different system to pursue them.

The same is true of our retirement. We have a target nest egg amount we’re aiming for by a certain age and we’re following a system of automatically contributing a portion of every paycheck to a 401(k) plan. We also have a goal of generating a certain average annual return and are using a system (multiple SMI strategies) to pursue that goal. But once I’m no longer working full-time, we’ll choose different goals and different systems.

So, goals aren’t for losers. They work hand-in-hand with systems to help us manage money well.

How do you see the interplay between financial goals and systems? And what are some examples from your own life?