Having clearly defined goals is critical to financial planning — or is it? For financial advisors, goals are ingrained in the way we talk and think, but I’ve found not everyone thinks about managing money this way. Pre-retirees who’ve spent years considering the next phase in life often come to the table with a few concrete desires. But for millennials and Gen X-ers, it’s hard to plan past the end of the quarter, let alone something as intangible as retirement decades from now. And if your only goal is to keep your head above water and save like crazy, here’s another approach: focus on your wealth-building habits and systems.  

Consider this quote from James Clear’s book, Atomic Habits: “You do not rise to the level of your goals. You fall to the level of your systems.”

That’s so true. Think about the world of sports, specifically baseball, since spring training is currently underway. Each team wants to win the World Series — but instead of just focusing on that huge goal, players must think about their habits and systems, which include practicing, eating healthy, staying injury-free, and being a student of the game.

You’re probably not a ballplayer, so those habits and systems aren’t relevant, but here are three I recommend if your long-term financial goals aren’t clearly defined:

Your savings system:

• Bucket 1: an emergency fund of six months’ cash
• Bucket 2: a mixture of low-risk investments for expenses occurring in the one- to four-year time frame — like buying a car or upcoming education costs
• Bucket 3: a mixture of investments for wealth building or expenses you might incur far off in the future

Your investment system:

• Don’t try to outsmart the market.
• Focus your attention on your mix of stocks and bonds, something that could be the biggest determinant of your portfolio’s long-term outcome.

Your retirement system:

• Strive to maximize your savings by investing 15 to 20 percent of your income — proportionally increasing the amount as your income rises.
• Don’t get stuck with everything being saved in your pre-tax 401(k), but use all three types of accounts for saving: taxable, tax-deferred and tax-free.

This goal-free strategy can also be used to make estate planning, insurance, and charitable giving decisions. It’s as simple as starting a new habit and system, because the traditional approach focused on goals doesn’t necessarily do a great job for everyone.