Goal setting is best used for short term, and traceable plans. A good goal would be saving 1000 dollars. A weak goal is simply deciding that you are going to save something out of every pay-check.
The main difference is that in the first case, your goal has a clear ending point and it is quantified, which allows you to know how far along you are. In the latter instance, there is no clear finish line and as you didn't set a target, you could be saving anywhere from 10c to 50 dollars and technically still be meeting your goal.
It is important that goals are clear so that you do not feel uncertain as to whether or not that goal has been reached. Equally key, is to set goals that are reachable, even if it is a bit of a stretch. If the only conceivable way you have to reach the end result is for your to win the lottery, that is an intention not a goal.
When setting goals, especially those that are financial, it is very important to know how you intend to achieve them. Goals should be broken down into a step by step process. Setting a goal but not determining how it will be met, can leave you feeling lost and even discouraged along the way.
It is all right to build in a challenge into a goal. For example, in order to save 100 dollars a month you may decide to buy fewer books to make saving easier. If this is something that will be difficult, you should acknowledge this challenge as a separate part of the process.
Meeting challenges takes a different type of energy and its own motivation. You need to honour that, so that your failing at this additional challenge, does not completely derail your goal.
Using a clear format will also prevent you having too many goals at the same time. A long list of goals is demoralizing and can lower your productivity. If you clearly define each goal, you will be less likely to take on more than you handle.
Goal: I want to save 100 dollars every month in 2015.
How: I will transfer the money to an account when I get paid and then live on the rest.
Why: I need 1000 for a trip next year, and 200 for my yearly term insurance.
Challenge: Buy only 1 book a month. Use extra funds for my goal.
Why: I find I buy books but don't read them all before buying more.
Setting goals is a wonderful way to steer your ship in the right direction; use them wisely and they will bring clarity and focus to your plans.