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How to build a financial plan

Updated: Mar 9, 2023

A financial plan is a comprehensive strategy for managing your finances to meet your goals and objectives. It is a roadmap that outlines your current financial situation, identifies your short-term and long-term financial goals, and provides actionable steps to achieve those goals.

Building a financial plan might be one of the hardest things you will do. While creating a plan of any sort can be difficult, a financial plan can be particularly daunting. Our family has created a skeleton version of a financial plan and it has helped guide our money-making decisions along the way. As a result, our finances are quite healthy (we added $250k to our net worth in the last 3 years!).

I'm not saying that creating a financial plan is for everyone, or that everyone should make a financial plan. I'm saying that if you have it in you, and planning is something that you can bear then, create a financial plan, a one/two/three/four/five/fifty-year financial plan, and see what comes of it. If you are up for it then you just might be ready to take the next step in owning your financial future.

What is a financial plan?

To get us started let's define what a financial plan is. At its most basic level, a financial plan is a plan telling you how your money is going to be spent over a specified period of time. The period of time is defined by you and the level of detail is also defined by you.

You can create a financial plan for next week, next month, or for the next 10 years. The most common parts of a financial plan include the following:

  • Your income

  • Your expenses

  • Savings

  • Financial goals (401k, college savings plan, saving for a car/trip/etc)

  • Debt

  • Estate planning

Again, your financial plan can be as simple or as complicated as you would like. There is no "right" definition of a financial plan

Why build a financial plan?

You should build a financial plan for so many reasons, and it all ties back to the loose definition of a financial plan. You should build a plan if you want or need to buy a new car soon. You should build a plan if you want to buy a home, go to college, pay for someone else's college, or just creating a plan around your food spending.

A good financial plan is something that you can stick with, guides your behavior, and improves your financial life in the process. These are all the reasons you should build a financial plan.

How Do I Write a Financial Plan?

Creating a financial plan can be a daunting task, but it doesn't have to be. Here are some steps to guide you through the process:

  1. Define your financial goals: Identify what you want to achieve financially, such as saving for retirement, buying a home, or paying off debt. Your goals should be specific, measurable, achievable, relevant, and time-bound (SMART).

  2. Assess your current financial situation: Review your income, expenses, assets, and liabilities. This will help you understand your current financial situation and identify areas where you can make improvements.

  3. Develop a plan: Once you have identified your financial goals and assessed your current situation, you can start developing a plan. This plan should include actionable steps to achieve your goals, such as creating a budget, paying off debt, and saving for retirement.

  4. Implement your plan: Start taking action to achieve your financial goals. This may involve making lifestyle changes, increasing your income, reducing your expenses, or investing in the stock market.

  5. Review and revise your plan: Review your financial plan regularly to track your progress and make any necessary revisions. Your financial situation and goals may change over time, so it's important to adjust your plan accordingly.

What Are Some Companies That Can Help Me Make a Financial Plan?

If you need help creating a financial plan, there are many companies that offer financial planning services. Here are some examples:

  • Voya Financial: Voya Financial offers a range of financial planning services, including retirement planning, investment management, and insurance.

  • Fee Only Financial Planner: A fee-only financial planner is a financial advisor who only charges for the services they provide, rather than earning commissions on the financial products they recommend. Depending on your preference this may be a good option for you.

  • Empower (formerly Personal Capital): Empower is a digital financial advisor that offers personalized investment advice and financial planning services.

What Is Legacy Planning?

Legacy planning is the process of preparing for the transfer of your assets to your heirs or charitable organizations after your death. It involves creating a will, establishing a trust, and other estate planning strategies to ensure that your assets are distributed according to your wishes.

For some, Legacy Planning isn't something they will be doing. For others, this is a critical part of financial planning and could take quite some time to get in place.


Creating a financial plan is an important step in achieving your financial goals. By defining your goals, assessing your current situation, developing a plan, and taking action, you can achieve financial success.

If you need help, there are many companies that offer financial planning services, and legacy planning can help ensure that your assets are distributed according to your wishes.

While I'm not a financial advisor, I'd be happy to answer any questions you have to the best of my ability. You can sign up for our email newsletter or email me directly at

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