Every financial plan starts with asking yourself what you want to achieve and then creating a list of your dreams and goals. A comfortable retirement takes the top spot for many people, but you may also have plans to buy a home, send your kids to college, start your own business, travel, or forgo full-time employment to live off your investment income.

"Knowing what you want and putting it in writing is an important first step," said Rob Williams, managing director of financial planning, retirement income, and wealth management at the Schwab Center for Financial Research. "But to get where you want to go, you'll need to be more specific. For example, which goals will you work toward first? How much money will you need? And when will you need it?"

Once you've identified your goals, answering these questions can help you determine whether your goals are realistic and how you'll need to save or invest to reach each of them.

With that in mind, here are three steps to help you set effective financial goals.

1. Prioritize

Most of us have limited financial resources, making it difficult to save for all goals equally—so it's essential to list your goals in order of importance.

One way to do this is to group your savings goals into two buckets: needs and wants.

Saving for retirement will likely be high on the list of needs. So might be paying off high-interest debt. And if you haven't yet set up an emergency fund with enough money to cover at least three to six months of essential living expenses, make that a priority too.

Wants, on the other hand, can include a new car or a dream vacation—but also goals of major personal importance, such as buying a home or saving for a child's college. The important thing is to be honest with yourself about what you absolutely need so you can tackle those items first.

Funding your needs first is especially important in leaner times when you might not be able to save for everything at once. "Saving for retirement may not seem like a top priority when you're younger—especially when you're trying to pay off student loans or managing other financial obligations," Williams said. "But saving enough to fund a 30-year retirement is a big undertaking, so the earlier you start, the better off you'll be."

2. Get specific

Once you've prioritized your goals, the next step is to figure out what it'll take to achieve them. In particular, consider focusing on two key factors:

• Dollar amount: Assigning a price tag to each of your goals will help you figure out how much you need to save in order to get there. For example, if you're looking to purchase a $300,000 home, the gold standard is to save 20%—or $60,000—for a down payment. You may be able to put down less than that, but lenders typically require you to purchase private mortgage insurance to compensate.

  Longer-term goals, such as retirement, can be tougher to estimate. One school of thought is you'll need 75% to 80% of your current income in order to maintain your present living standard, but we believe it's safer to assume roughly the same level of current income minus savings. Broad estimates like this could be a decent place to start if you're many years away from retirement. If you're withing five to 10 years of retirement, you'll likely want to use a budgeting calculator to estimate your expenses for a clearer picture and any adjustments you may need to make to get there.

• Target date: Next, divide your savings goals into near-, medium-, and long-term buckets based on how soon you'll need the money. Not only will this help determine how much you should save each month, but it also will inform how best to consider investing your savings.

After you identify your target savings amount and timeframe, you can use Schwab's complimentary tools and calculators to see where you stand with your goals. If any of your goals feel unattainable, revisit your priorities and look for places to cut back. "It's a balancing act," Williams said. "You want to find a solution that allows you to live comfortably today while making meaningful progress toward tomorrow."

3. Take action

Now that you've identified your goals and determined how much you need to save to reach each one, it's time to document those details as part of a holistic financial plan, which should incorporate not only your future goals but also your present circumstances to give you a better sense of where your money is going.

That said, there's no need to wait to start saving toward your biggest and most pressing goals until you have your financial plan totally buttoned up—the sooner you start, the more time your money has to benefit from potential compound growth. Also, be sure to review your progress toward each goal at least once a year. (The shorter the time frame of your goals, the more frequently you'll want to check in.) This helps ensure you're on track for each goal, and you'll have an opportunity to correct your course, if necessary.

You might also find that your needs change over time. Maybe you changed jobs, had a baby, or got married. Other developments—such as an unexpected medical bill—might also mean revising your time horizon. "Big life changes can have a huge impact on your priorities as well as your means and timeframe for getting there," Williams said. "So, checking in and remaining flexible are key."