Goals are where you want to be or what you want to have achieved by a certain time. They can be broken down into short term, mid-range, and long term increments. They should be realistic, or else you set yourself up for failure.
I find short term goals relatively easy to set and obtain. What to you want to do today? For me, today, I want to finish that afghan. It's so close to being done now I can see the end. My greatest fault is underestimating the actual time required to accomplish what I set out to do. Will I actually finish it today? I'm not sure, but I'm going to give it my all!
Mid-range goals are slightly less concrete. What do you want to accomplish in the next few months or year or two years? A look at the editorial calendars tells me that submission dates for different magazines are quite close at times. Therefore if two submissions are required for August, can one of them be done by the end of July?
Long term goals are where you want to be. They are the road map to keep you on the path. I was once told by a respected elder to hand write a list of things I wanted to accomplish in the next 5 years and why and post it on my mirror. By seeing this list every day, I managed to successfully accomplish every item on that list, including buying a house, in only 4 years! By checking an item off the list and noting the date it was accomplished, you gain confidence that the rest of it is possible.
Setting goals gives you reason for why you are doing something, which is especially important when frustration sets in. It helps with time management as well, as it can help you prioritize. Achieving goals provides a sense of accomplishment like no other. The trick is to make the goals realistic so you are not setting yourself up for failure.