The key to financial success is figuring out what you want your money to do for you, then making a plan to help your money do exactly that. Your goals might be different from your relative’s, friend’s or neighbor’s. That’s OK, as long as you know what you’re working towards and why.

The first step towards reaching your financial goals is knowing exactly what those goals are. You don’t have to be particularly specific in this step. Simply making a list of what you’d like to achieve financially is sufficient. If you’re stumped in terms of what your goals could be, here’s a list to get you started:

  • Build up an emergency fund.
  • Pay off student loans or consumer debts.
  • Save up money for a down payment on a house.
  • Save for a wedding or honeymoon.
  • Start saving for your children’s college education.
  • Save for retirement.
  • Creating and sticking to a budget.

Not all goals are the same. “Save money” is a goal, but it has little definition. How will you save money and how much money do you want to save? “Save $1,000 by the end of the year by making automated deposits into a savings account” is another goal. It’s also an example of a SMART goal. According to Project Smart, the concept of SMART goals comes from project management. It’s an acronym that stands for Specific, Measurable, Achievable, Realistic and Time-Based.

The more specific you can be when setting your goals, the easier they will be to achieve. In the case of an emergency fund, for example, you might decide to save up six months worth of income over the course of two years. To do that, you’d have to stash away 25 percent of your income each month in a savings account.

Once you have a list of goals, it’s time to focus on prioritizing them, so that you know what to focus on first. Often, saving money in an emergency fund or paying off expensive debt are the two goals people tackle first. Saving for retirement usually comes next, followed by saving for a home or other major financial purchases. Prioritizing your goals allows you to know where to devote your energy. Asking yourself a few questions can help you determine which goals are the most important:

What will happen if I don’t achieve this goal? (For example, if you don’t have an emergency fund, how will you pay for an unexpected expense?)

How expensive is this goal? (Will putting off paying down debt cost you more in the long run?)

Why do I want to achieve this goal? (Will you gain financial independence or security, be able to pursue your interests or have a more comfortable life after you reach your goal?)

Now that you know what you’re working towards, it’s time to make a plan to reach that goal. According to US News and World Report, the ideal plan should be specific yet flexible enough to weather any changes in your financial life from month to month. A simple plan might be to put an extra $100 per month towards your debt or to save XX percent of your income each month.

When your plan is in place, the next step is to put it into action. Automating deposits to your savings account each month or auto-scheduling debt payments are among the easiest ways to make sure you stay on track. You can always cancel or adjust automated deposits if you have a setback.

Think of setting goals for your money as a journey. The first step is the most important.

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