No two ways about it, America’s saving habits stink.

According to data from the St. Louis Federal Reserve, the U.S. personal savings rate as of Sept. 2016 was just 5.7%. That’s down nearly 50% from where we were 50 years ago, and it’s a far cry from what the citizens of other developed countries are socking away.

It’s not hard to understand why America’s saving habits are so poor. Aside from the fact that consumption comprises around 70% of our GDP, and thus consumers tend to be freewheeling with their disposable income, a bigger factor could be that just a third of American households is keeping a detailed monthly budget, at least according to Gallup. Gallup’s findings in 2013 showed that it really didn’t matter all too much how much money you made, what political ideology you believed in, or how educated you were — America gets a big fat “F” when it comes to budgeting.

Why budgeting is so important

The purpose of a budget is pretty simple: to understand your cash flow. If you have a good understanding of how much money you’re bringing in and, more importantly, a solid comprehension of where that money is going, then you’ll be in a much better position to succeed in setting money aside for an emergency savings account or for your retirement. Saving money for retirement is especially critical for today’s workers given that Social Security could be facing benefit cuts of up to 21% within the next 18 years and life expectancies continue to lengthen, meaning your nest egg has to stretch even further.

There are a number of simple actions consumers can take to increase their odds of staying on track. For example, getting everyone in your household involved can be critical to sticking to your objective. This means kids and grandparents should also be abiding by the budgetary rules of the household. If you live alone, then meeting once or twice monthly with like-minded individuals who share similar goals could be the impetus that keeps you on track.

Along those same lines, something as simple as using cash for your purchases instead of credit can make a huge difference. Credit cards are exceptionally convenient, and the only true accountability we feel is when we receive the bill many weeks later. If you were to use cash, though, you’d have an immediate and tangible loss of value since you’d be handing over your cash in exchange for a good or service. Using cash could be a good way of reducing discretionary purchases.

It’s time to get “SMART”

But, no matter what steps you take to improve your odds of saving money, nothing is more important than your budgetary goals. Without well-defined goals and an action plan, your chances of success aren’t good. The best way to increase your odds of formulating a successful budget is to get “S.M.A.R.T.”

The acronym “SMART” stands for:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-based

Be specific: One of the biggest problems with budgeting and trying to save money is that people are often far too vague. Simply saying that you’ll “save money” simply isn’t good enough. Instead, you need to set a specific end goal that you’re aiming for, such as “I will save enough money to fully fund an emergency account and maximize my Roth IRA contribution.” The more specific your end goal, the better shot you have of reaching it.