Often when we set goals for ourselves, they’re big goals. We want to be debt free. We want to have enough saved for retirement. We want a big, fat emergency fund, just in case. While we’re gung-ho when we set the goals, because they are big they are also long-term. And long-term financial goals can seem like impossible achievements when that gung-ho turns to ho-hum.

No matter how big a goal, it takes small steps to get there. And taking the time to set milestones so you know you’ve achieve those small steps is the best way to stay motivated, and keep on truckin’ toward your goal.

Milestones work because they let you celebrate your incremental successes along the way. And that helps to keep you motivated to make wise financial decisions day to day.

Let’s say you want to be debt-free. Broken down, that means you may want to be free of all your consumer debt within 3 years, your student loans within 5 and your mortgage by the time you retire.

If you’re snowballing your consumer debt repayment, then you already have a list of individual debts. All you have to do now, is write in the date by which you want to banish each individual debt. When you do, you’re going to reward yourself by… whatever turns your crank that doesn’t cost tons but makes you feel great.

A longer-term goal such as having your mortgage paid off at retirement may not seem to have many milestones.  And if all you do is keep paying your mortgage on the schedule you’ve chosen, then this goal is a no-brainer. But if having paid off your consumer debt you decide you want to pay off your mortgage earlier, in addition to a long-term goal, you’ll need to set annual milestones. So you might decide that you’re going to put a principal prepayment of $6,000 against your mortgage every year, which means you’ll have to set aside $500 a month in your budget. Have that money auto-debited to your Mortgage Prepayment Savings Account and you’re on your way. Make the annual prepayment and you owe yourself a treat!

When it comes to saving, there can be several pools you’re trying to build: the Essential Emergency Expenses pool, the Retirement pool, the Educational Savings pool.

To save your Essential Emergency Expenses, you first have to decide how much you’re going to save. Will it be three months of your net income? Will it be six-month’s worth of your Essential Expenses? You might then decide it’ll take you half a year to save your first month’s worth of Essential Emergency Expenses. Once you bag that, grab a reward and start on the second months’ worth. Get the picture?

When it comes to setting milestones for your long-term savings, you can do it either based on an actual dollar amount as in this year I’ll save $100 a month; next year I’ll save $200. Or you can base your savings on a percentage of your income. This year I’ll save 10%, next year 12%, and so on. Your ultimate goal should be to contribute the maximum amount to your retirement plan that you are allowed by law. It may take several years to work up to the top limit, so setting milestones along the way will help keep you motivated toward your goal.

Create any number of milestones to help keep you focused and feeling great about your accomplishments. The smaller the step to achievement, the more successful you’ll feel. Pretty soon you’ll be so focused on the final outcome because you’re so used to being successful that the small rewards will pale in comparison to achieving The Big Goal.