The beginning of the New Year is a good time to examine our vision of what it means to be financially successful. I meet people in my classes all the time who have very different visions of what it means to be financially successful. For some, it’s an income: “I’m successful because I earn $100,000 a year.” For others, it’s a lifestyle: “I’m successful because I drive a $70,000 sports car.” Still, others tie their financial success to their net worth: “I’m successful because I have a net financial worth in the neighborhood of one million dollars.”

These definitions see financial success as a target to shoot for. I define financial success much differently. For me, financial success is a process.

To put it simply, I believe that financial success is the extent to which we achieve our financial goals.

When I refer to financial goals, I’m not talking about the big, long-term financial goals, like retirement or buying a home. These are important. However, establishing short-term goals is the best way to get what we want and to stay motivated to live within (or below) our means.

If the only financial goals we have are those that involve thousands (or millions) of dollars and require years or decades of saving to achieve, we will have a near-impossible time staying motivated to achieve those goals. Why? Because we simply do not relate our day-to-day activities, and more importantly, our day-to-day purchases, to large dollar amounts for purposes that are ten or twenty years down the road.

However, if our financial goals are short-term and modest (less than one year away and less than $1,000) we can easily wrap our minds around both the timeline and size of the goal in order to allow both to influence our daily decisions for the better.

Let’s say I’m at work one day, eating soup I brought for lunch (which is pretty common). At some point, I might begin to ask myself if I would prefer to go out for lunch instead. After all, “It’s just an extra ten dollars to go to a nice sit-down restaurant where I can enjoy a meal and relax a bit! That ten dollars won’t keep me from reaching my $1,000,000 retirement goal, right?” Wrong, actually. It will. Ten dollars a day for thirty years adds up to $108,000. However, invested for thirty years at an average return of 9 percent, that same ten dollars a day will add up to over half a million dollars. So go ahead and enjoy eating out every day for the next thirty years. Just be sure to order a beer to cry in over the $440,000 of lost interest you could have earned.

On the other hand, if my goal is to take a $500 weekend trip to a mountain cabin with my wife five months from now, I quickly understand that each extra ten dollars that I’m spending on dining out make up a significant portion of my goal. Two percent in fact! And, being the mathematical wizard that I am, it may only take me the rest of the morning to figure out that I would need to not eat out another fifty times (for two months) in order to equate my savings to the total amount of my goal.

So, setting our own financial goals is the key to achieving financial success. If we want to set large, long-term goals, then, by all means, let’s go for it. We just need to break them down into monthly, if not weekly or daily, goals as well.

My wife, Wendy, provides a perfect illustration of this point. Back in 2009, she and I discussed our wish to take our young family on a Disney cruise for a week. Setting aside the discussion of whether a Disney cruise (or any cruise for that matter) is a good idea for a family that included a non-potty trained one-year-old plus a three-year-old, let me tell you what that discussion did for us. We determined that we would, after all, take our family on a cruise in the fall of 2010. Once we set that goal, my wife went to work over the next year researching costs for airfare, cruise tickets, hotels, and even passes for an Orlando theme park for a couple of days. Because we had agreed and written that goal down (in our calendars), she was always on the lookout for good deals and certainly found them. She also noticed offers over the next year for special pricing on travel and lodging so that the budget for those expenses amounted to just a fraction of the expected costs.