Financial Fundamentals Blog

Financial planning: How to create a plan and stick to your goals

Happy young couple creating a financial plan for the year


No matter how big or small your financial goals are, a financial plan can help you make those goals a reality. Think of financial planning as a roadmap to help you achieve your goals. It’s an ongoing process that can help you feel more confident about your finances and navigate any bumps in the road, such as inflation or a recession. Let’s take a look at how to create a financial plan — and how to stick with it.


What Is Financial Planning?

Financial planning is an ongoing process that provides a comprehensive picture of your finances, goals and strategies. It helps you make the most of your money by taking your savings, cash flow, investments, debts, insurance and other financial elements of your life into consideration.


While a financial plan is necessary for meeting your goals, it’s also important for giving you the confidence to make it through bumps in the road.


You may create a financial plan on your own, or you may seek assistance from a financial planning professional. This can be beneficial if your finances are complex or if you want to work toward larger goals, such as retirement.


Steps To Creating a Financial Plan

A financial plan can seem overwhelming at first, but breaking it down into smaller steps can help the process feel more manageable and ensure that you’re not skipping any important steps.


Set Goals

Your goals guide good financial planning, so first you’ll want to decide what you’re striving toward. Whether it’s purchasing a house or retiring early, setting a concrete goal will help make completing future steps in your financial plan more intentional.


When you’re deciding on your goals, you’ll want to follow a few guidelines. Make sure your goal is realistic and actionable, and also decide on a timeline for when you want to achieve it by.


Track Your Income

One of the key components of a financial plan is setting a budget and tracking where you’re spending your money. Your bank’s mobile app and a money management app are beneficial for tracking where your money is going each month. These apps will help you visualize your financial choices each month and determine how much you can set aside for your goal.


The apps will help you determine your budget, but keep in mind you likely won’t follow your budget down to the last penny every month. Keeping this in mind can help you stay on track instead of getting discouraged.


Optimize Your Checking Account

A checking account is a necessary component of financial planning, so you want to make sure it’s optimized. Your checking account can offer plenty of benefits or end up costing you money that could otherwise be directed toward your overall goal. For example, checking account fees and ATM fees can quickly add up, so make sure that the account can negate these fees — or explore free checking account options such as 7 17 Credit Union’s Free WOW Checking.


Tackle Your Debts

A crucial part of any financial plan is to tackle debts — especially high-interest debt. There are several methods you can implement to pay off your debts, including debt consolidation, directing extra funds toward an account with a high interest rate and directing extra funds toward the account with the lowest balance until all of your debts are paid off.


Create an Emergency Fund

Make sure that financial emergencies such as job loss or unexpected medical bills don’t become catastrophic. To do this, make sure you have approximately 3-6 months’ worth of expenses set aside in an emergency fund to help cushion your finances should an unexpected event occur.


Tips for Sticking With Your Financial Planning Goals

It can be easy to become lax with your financial goals. However, financial plans require regular attention to keep your plan on track. Here are some easy tips to help you do that:

  • Plan periodic reviews of your finances. Regularly review where your finances are at and compare to your goals so you can determine if you need to pivot with your savings or financial plan.
  • Automate your contributions. By automating deductions into your savings, you don’t have to worry about remembering to make a manual contribution or transfer from your checking account to your savings account.
  • Revisit your goals and consider the long-term perspective, taking market performance into perspective. This will help ensure you’re on track to meet your goals on your timeline.
  • Maintain your emergency fund. This will help you make sure your financial planning goals are continuing to stay on track, even in times of unexpected financial hardships.

Financial Planning: Your Solid Foundation for the New Year

Financial stability doesn’t happen overnight. To get started with setting and sticking to your financial goals, explore our guide, “How to Set Financial Resolutions for the New Year”.


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