What motivates you?
Do you get out of bed early on a Monday morning because of the exciting work that awaits? Or do you only get up and go to work because you need the money?
Do you force yourself to go to the gym because you want to look good? Or do you go to the gym to relieve stress and stay healthy?
Do you buy a bigger house because it’s what everyone else is doing? Or do you buy a bigger house because you’ve got a growing family?
For some time now, psychologists have drawn a distinction between such sources of motivation. While our motivation is often not as binary as the questions posed, psychologists call the alternatives intrinsic and extrinsic motivators.
This is an important distinction, but it needn’t be as reactive as my questions suggest. By designing our goals in the first place with this distinction in mind, we can have a powerful impact on our mindsets – and on the probability of achieving these goals.
Extrinsic Goals vs. Intrinsic Goals
Before we go any further, let’s set out exactly what is meant by extrinsic goals and intrinsic goals.
What are extrinsic goals?
Extrinsic goals are primarily focused on external aspirations related to money, status and image. For example, a goal to exercise more to look good for others is clearly an extrinsic goal.
By their nature, such goals require validation from the external world. Our degree of status or beauty, for example, are a question of perception from others.
Because of the role of external validation, comparison and competition play an important role in the journey towards these goals. But because extrinsic goals are so focused on the prize at the end of the journey – more power, fame or wealth, an improved image, etc. – the steps required to achieve that prize can be easily neglected.
What are intrinsic goals?
Intrinsic goals, on the other hand, relate to the pursuit of things that are meaningful to us. They address our individual needs and wants, often pertaining to issues like personal growth, close relationships and physical and mental wellbeing. Or as two researchers from the University of Rochester have put it, they satisfy our core needs for autonomy, relatedness and competence (more on that shortly).
Contrasting to the earlier example, instead of exercising more to look good for others, an intrinsic goal might be to exercise more to feel healthier. The clear distinction is that there is no emphasis on external validation. Instead, it’s simply a matter of who we are.
The Benefits of Intrinsic Goals
You can quickly see how intrinsic goals might leave us happier and more motivated in the long run. Pursuing external validation of our status at the expense of satisfying these intrinsic human needs is only likely to bring temporary happiness when we achieve it.
An increasing body of research now supports this view. Numerous studies have shown that extrinsic goals (e.g. for financial success, appealing appearance and social recognition) may be associated with lower levels of vitality and even higher rates of physical symptoms than intrinsic goals.
Conversely, with intrinsic aspirations like self-acceptance, community feeling and physical health, research has identified associations with higher wellbeing and lower stress. Studies have even shown that students with intrinsic goals may show improved persistence, performance and learning than those with extrinsic goals.
Rethinking Our Goals Using Self-Determination Theory
So how can we tailor our goals to shift our mindset? One theory may offer some answers.
Self-determination theory and intrinsic needs
Self-determination theory, developed by Edward Deci and Richard Ryan, suggests there are three main intrinsic needs which underpin our self-determination and motivation: autonomy, competence and relatedness. Let’s look at each of them in turn.
Autonomy refers to the idea that we must perceive that we have options and can determine what we do. Factors that restrict our degree of control and influence have been shown to decrease intrinsic motivation, along with factors that reduce our number of choices.
Competence refers to our need to achieve, while building knowledge and skills. Deci and Ryan argue that people have an innate intrinsic need to develop mastery over tasks that are important to them.
Relatedness refers to the idea that people need to have a sense of belonging and connection with others. Our relationships foster a greater sense of intrinsic satisfaction and motivation.
When assessing levels of self-determination, Deci and Ryan have argued that individuals can be placed in three categories (or ‘causality orientations’):
- Autonomous: This is where all autonomy, competence and relatedness needs are all satisfied.
- Strong controlled: This is where competence and relatedness are satisfied but autonomy is not.
- Impersonal: This is where all three needs aren’t satisfied and is closely related with lower levels of wellbeing and poor health.
Transforming extrinsic goals into intrinsic goals
By placing autonomy, competence and relatedness front and centre of our goalsetting, we can transform shallow extrinsic goals into more meaningful intrinsic goals. The best way to illustrate this point is with a few examples.
Example 1: A goal to exercise more
Extrinsic goal: “To do more exercise to look attractive to others.”
Intrinsic goal: “To do more exercise to feel healthier and get into peak condition.”
Upshot: By switching the focus inwards, we can create a goal more focused on competence and mastery.
Example 2: A goal to learn a language
Extrinsic goal: “To learn Italian because I need it for my job.”
Intrinsic goal: “To learn Italian to master a useful skill, learn about different cultures and meet new people.”
Upshot: By moving the focus away from the sense of being a prisoner to the goal, we can shift our motivation away from external validation (for the job only) towards the intrinsic motivators of competence and relatedness.
Example 3: A goal to save for a house deposit
Extrinsic goal: “To save for a house because you’re falling behind your peers.”
Intrinsic goal: “To save for a house because it gives you a more independent lifestyle.”
Upshot: By moving away from peer comparisons, we shape the goal of a home around our intrinsic need for autonomy.
Positively Shaping Financial Goals
Perhaps the area where I’ve best applied this shift is in my pursuit of early financial independence. The road to financial independence is long-term, and that means our overall vision must motivate and inspire.
Moving from an extrinsic aspiration “to be rich” to an intrinsic aspiration “to fully own my time” is by far the most important shift I’ve made in this respect. Instead of focusing on aspirations of a wealthy end state, this shift moves the focus to the things time will give me: opportunities to further satisfy my need for autonomy, competence and relatedness.
There is an important implication for long-term personal finance goals here. Aside from creating realistic and specific financial goals, aspirations should have an appropriate degree of focus on intrinsic motivators.
All this may sound like overthinking, but the science tells us it’s important. When we shift our mindset from extrinsic to intrinsic, we’re far more likely to achieve the goals we’ve shaped alongside this shift. What’s more, research suggests we might be healthier and happier for it.
What have you got to lose by trying?
