I saw a post on the forums here where the OP stated (paraphrased), "I want to save more and buy a house some day."

That's a dream. Dreams are things we like to think about as if they might magically happen. Most of us like to dream about what we'd do with our money, jobs, and family (and to our bosses and neighbors, sometimes) if we win the lottery.

The idea of what we do here at SA is "goal setting." A goal is an objective with the following criteria:

1. A time frame in which to accomplish it
2. A metric that tells us what the goal actually is.
3. A plan that gets us to the metric within the time frame.

Taking the original quote above, we can turn it in to goals with plans instead of dreams with wishes.

"I want to save more" becomes "I will save $25 per biweekly paycheck, putting $1300 into a Roth IRA. I can do this by cutting out four beers (plus tips) at my local pub every two weeks."

The time frame is 1 year. The metric is $1300.00 in a Roth IRA. The plan is to cut back entertainment spending.

"(I want to) buy a house someday" becomes "I am going to save $50,000 within 10 years to purchase a $250,000 home with 20% down and no PMI. I will do this by setting aside $200 per paycheck in a mutual fund account with a target date of 2023. I will get the $200 by turning off my cable TV, scaling back my cell phone plan in 14 months when it expires, bringing my lunch to work 4 days per week, and quitting smoking."

The time frame is ten years. The metric is $50,000. The plan is to cut back on entertainment, luxuries, and bad habits.

Note that neither plan counts on pay raises, but also that neither plan expects a job loss. I feel that these two occurrences are "plan changers" whether to the good or to the bad. In other words, either event will require a re-working of the goals, metrics, and plans, but both are more or less beyond my direct control.

I used to be the first guy from the quote. I am pretty much the second guy, now, when it comes to planning instead of dreaming.

Do you know why most people don't hit their savings target? Because they don't aim at anything; they wish for it to happen.

So, when I buy a lottery ticket, I used to say, "I'm just doing a little retirement planning."