Financial Plan 101: Solid Steps to Improve Your Finances

With a solid financial plan, you won’t find yourself stuck without money when you most need it and you will even be able to spend for other expenses in the future.

financial plan

Nowadays, it’s so important to know when and where to spend your money and have some sort of plan for the money that you have or will be earning.

This is why it’s essential to have some sort of financial plan so that you can plan and prepare for things in your life such as buying a car or a house.

The thing is no one is really going to take care of your finances except you.

You see a solid financial plan will also allow you to save money, make investments, and plan even for retirement.

Today, we’ll take a look at finance plans and how to form them, and how you can make them work for you.

What Is a Financial Plan?

A financial plan or sometimes simply a finance plan is a way for individuals to plan out their finances in such a way that they can budget for their daily expenses, savings, purchases, and investments.

The problem often with financial planning is that one financial plan is not the same as another.

You can’t make direct comparisons because people have different incomes and financial plans are customized on what individuals are looking to purchase in the future.

So if you’re looking to create a financial plan that will serve you to become financially independent and build wealth for you and your family, then you’re in the right place.

In this post, we’ll guide you with everything you need to know to guarantee your financial future. 

List What You Need to Plan for

Before you can begin with your financial plan, you should know what exactly you need to plan for.

These are your expenses and possible future purchases and are essential to your plans. These include the following:

  • Your personal monthly budget will help keep your expenses low
  • Pay off the debt that you may currently owe.
  • An emergency fund for unexpected expenses
  • Retirement savings
  • A portfolio of investments
  • Streams of income
  • Short, mid, and long-term purchases
  • Insurance coverage of different kinds

By listing what you need, you have a better idea of your potential budget and plan long-term on the purchases.

Find Out the Financial Plan You Need

Next, you need to actually make an assessment of what kind of financial plan you need.

Remember that it’s never too early or too late to start one.

Knowing the kind of plan will determine your direction.

1. A Plan For Yourself

If you’re single, you will want to establish a financial plan that will help you meet your immediate goals and ensure that you have money for the future.

This means that you will have to ensure you do everything you can for your plan without simply assuming things will work themselves out.

This will also ensure that if you do get into a relationship that you are not leaving another person the burden of taking care of your finances.

2. A Plan for Your Marriage

If you are married or have a partner in life, then your finances should be planned as a team.

Discuss your budget and money goals together when making financial decisions.

Both of you need to come to an understanding of how much money you currently have and how much goes into savings and investments.

Remember that you cannot plan for yourself as your finances will also impact your spouse. 

Should you have joint accounts or separate accounts?

Joint accounts in general are great and should be considered when you can.

However, it’s also good to have a personal account as well. A personal account would give you a sense of ownership and individuality even if you are already in a relationship.

However, ensure not to keep it a secret and keep it for your personal transactions.

Marriage and committed relationships will only thrive on open communications and honesty.

Creating a Financial Plan

financial plan

There are 10 solid steps that we suggest for you to meet financial success in your plans.

These steps will be a great guide for you to start with and can edit it as you go along.

These include the following:

  1. List Down Your Financial Goals
  2. Begin an Emergency Fund
  3. Take Care of All Your Debts
  4. Create an Investment Plan
  5. Get the Right Insurance
  6. Look Into a Retirement Plan
  7. Make Sure to Plan for Taxes
  8. Build an Estate Plan
  9. Review Your Plan Frequently 
  10. Stay the Course, Don’t Overspend, and Learn from Your Mistakes

These 10 steps will ensure success for the future of your finances and your family’s. 

List Down Your Financial Goals

Make sure to have an idea of what your goals are.

You need to know what you want to achieve so that you can actually make it your goal and plan your finances around it.

Make it well defined and detailed and make sure to break down large goals into smaller chunks.

This makes your goals achievable and not overwhelming. 

Begin an Emergency Fund

How many times have you experienced where you were caught off guard with an expense you weren’t prepared for.

It could have been an emergency trip to the hospital or a repair for your house or your car that was unplanned.

Emergencies happen and it’s good to be prepared for such things.

Make sure to keep a separate amount of money for emergencies on a rainy day separate from your savings.

Take Care of All Your Debts

We cannot stress how important it is to take care of and pay all your debts.

The truth is, as long as you have debt, you are paying for not just the debt amount but the interest which in the long run could actually be larger than the debt itself.

Create a strategy to pay off your debt at the soonest possible time.

Create an Investment Plan

If you really want to build wealth and be prosperous in the long run, then you need to put the money you have to work.

Invest as soon as you can.

It doesn’t have to be a large amount and it can even just be a few dollars a month.

But that can potentially become huge in the right investments.

Research investment options such as stocks and mutual funds.

You may also want to consult an expert so that they can show you all that’s available for you.

Remember that your savings and emergency funds won’t go a long way but investments can make money and in the right investment can even multiply.

Get the Right Insurance

financial plan

We cannot understate how important insurance is.

It would be a shame that after working hard for the money you have earned for it to go to unforeseen expenses.

We mentioned earlier that an emergency fund can take care of that but insurance can also help minimize expenses and save money at the same time.

You can get insurance for your home, your car, and even health insurance.

Choose the right insurance for your needs but make sure to stay within budget. 

Look Into a Retirement Plan

If you don’t want to work your entire life, one of the things you should plan for is retirement.

Creating a plan to save up for your retirement so that when you do retire, you will have the money you can use to live off.

While retirement can be a lifetime away, it’s never early to start. 

Make Sure to Plan for Taxes

Taxes can be an annoying thing but they are not going to go away anytime soon.

It’s your legal obligation to pay off any taxes that you may owe the government.

Make sure to plan how you’re going to pay them every year so always make a budget to set that aside.

Build an Estate Plan

The truth is, most people don’t like to think about estate planning but let me tell you how important it also is.

By planning this, it will determine what will happen to your assets when you are gone.

This involves listing your assets, writing down a will, and making it accessible to the people who need access to it.

Estate lawyers and financial planners can help you set it up.

Review Your Plan Frequently

Make sure that once you have a plan outlined and it has started running, make sure to review it from time to time.

As your income grows or there are purchases that you need to make, you will have to be flexible and make adjustments as necessary.

Make sure to keep it updated and get advice when there are significant changes in your finances. 

Stay the Course, Don’t Overspend, and Learn from Your Mistakes

Make sure that once you have a plan in place and it’s running to stick to it.

It’s so easy to forget your plan or deviate from it.


Follow your plan as much as possible and keep within your budget as much as possible.

If your expenses change, review your plan and see what you can change to continue on your plan.

It’s also important to make sure to learn from your mistakes.

If you made some financial mishaps.

Don’t worry, it’s not the end, but always review what went wrong and what you can do the next time so that you don’t repeat your mistakes.

financial plan

Final Thoughts

At the end of the day, the only one who will take care of your finances is you.

With a solid financial plan, you won’t find yourself stuck without money when you most need it and you will even be able to spend for other expenses in the future.

It is never too late or too early to start and you can ensure that you won’t regret having a good financial plan.


Author: John Benares

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