• Set exciting goals. Your goals should keep you motivated to reduce spending and save for the future. For instance, instead of "saving for retirement," a specific goal would be "retiring at age 60 with $1,000,000 in investments so you can travel and golf." Whenever you're tempted to abandon that goal, visualize what you're saving for.
  
  
• Make your goals meaningful to you. Everyone knows they should be saving for retirement, but if you think you're too young to worry about that, set another goal that is relevant to you now. When you are getting started, setting goals you're motivated to achieve will help you realize the importance of the goal-setting process. Once you achieve some short-term goals, you may become more motivated to set longer term goals.
  
  
• State your goals in measurable terms. Quantify your ultimate goals as well as interim goals so you can track your progress. If you need $500,000 in 20 years, how much should you have after one year, five years, or 10 years?
  
  
• Prioritize your goals. If you have more than one goal, you may not have the resources to achieve all of them at the same time. Prioritize your goals so you work toward those most important to you.
  
  
• Don't be afraid to set ambitious goals. Just because a goal is difficult to achieve doesn't mean you should not strive to achieve it. It does mean you'll have to develop appropriate strategies and stay disciplined.
  
  
• Reward yourself when you make progress toward your goals. To maintain your commitment to goals that can take years to achieve, reward yourself when you reach interim goals.

After setting goals, you'll need strategies to achieve those goals and a way to measure your progress. While that can require significant effort, significant payoffs are also involved. In a recent survey, 48% of respondents who were working toward their goals were very happy with their lives, compared to 30% of those just starting to work on goals and only 18% of those who didn't have goals (Source: Money, November 2003).