“He who fails to plan is planning to fail.” So said Winston Churchill, and the thought applies to many facets of life, especially financial planning. It is one thing to say that you want to own a yacht one day or be a millionaire, but those aspirations are only dreams without a solid plan. Setting goals keeps you on track and gives you a solid understanding of what you’ve accomplished and what you still need to work toward.

Consider using the SMART (Specific, Measurable, Achievable, Relevant, Time-bound) model to help in making smaller productive goals instead of lofty aspirations.

Specific

Picking out an identifiable purpose of your goal is the first step in making a SMART goal. Think of New Year’s resolutions where people say they want to save money or lose weight. They have not identified why they want to do these things, so it is hard to feel like the goal is ever truly achieved.

Measurable

Let’s say you want to save money for a new bed. You don’t just want to save money, or else you could just save until you can afford the cheapest bed and be done. Sure, you will have achieved your goal, but you came out of it with a cheap, uncomfortable bed. Let’s set the savings price point at $1,500.

Achievable

A huge part of making a worthwhile goal is that it is achievable. This is where things can be subjective. What is achievable will vary depending on an individual’s circumstances. It can also depend on how long you are willing to spend on your goal. Saving $1,500 dollars in a month isn’t feasible for many people but saving $1,500 in six months can be achieved by putting away $250 every month.

Relevant

No matter how well your goals are put together, it won’t be beneficial if the goal doesn’t mean anything to you. There isn’t much point in saving for an airplane if you don’t know how to fly one and have no intention of learning. Everyone needs to sleep, so saving to buy a new bed passes the relevancy test.

Time-bound

The final piece of the puzzle is to determine when you want your goal to be completed. If there isn’t a deadline against which to hold yourself accountable, there is nothing stopping you from pushing your goal further down the line until you give up. Since it is achievable to save $1,500 in six months, that will be your deadline.

At the end of the process, you now have a fully developed goal. You are going to spend six months saving $1,500 for a brand-new bed by saving $250 a month. This goal has been simple enough to construct, but some ambitions will require multiple SMART goals to achieve.

Pheonix Gilbert is a management trainee for F&M Trust.