5 Step Guide to Planning Your Financial Future

Planning for your financial future

What do you think of when you see the phrase “planning your financial future?”

It almost feels like the “What do you want to be when you grow up?” question all of us were asked when we were kids. Honestly, after many years, more than I’d like to admit, of being “grown-up,” I still don’t know the exact answer to that question.

But, what I do know is that I’ve always been extremely enthusiastic about building wealth. And if asked, “how do you feel about planning your financial future,” I would get excited! No, seriously, like super excited. If you can identify with that, then you’ve come to the right place. 

This 5 step guide to planning your financial future is where you need to start.

Step 1: Complete Your Financial Assessment

Assessing Your Financial Health

The first step is your financial assessment. Don’t be intimidated by this term. It’s just another way to define your assets and liabilities in order to determine your net worth. I won’t go into the details of the net worth calculation, but here’s a quick look at the calc for your reference.

Assets – Liabilities = Net Worth 

Why is calculating your net worth such an important step?

The short answer is because it can give you a good starting point to view your total financial picture. Now, don’t get me wrong, some assumptions need to be made to get to this number; however, as long as you are realistic about your assets and liabilities, you can get a pretty good look at your overall financial health.

Additionally, taking a look at your net worth can be the perfect tool to review before setting financial goals.


Consider this example; if you notice a substantial amount of credit card debt in your liabilities section, you may want to develop a plan to pay those off aggressively. Seeing where you are is the perfect way to start seeing where you want to be.

***BONUS TIP: Keep a journal showing your quarterly and annual progress. Update your net worth each time you do a check-in. In the long run, seeing the progress you will have made while planning for your financial future can be very motivating.

Setting Financial Goals

Step 2: Set Actionable Financial Goals

Once you have your net worth laid out, then it’s time to set some goals. Now, don’t be alarmed if your net worth calculation turns out to be a negative number. It’s cool, that’s why you’re planning for your financial future. Nothing ever starts perfect, but we’ll get you there.

Ok, let’s get into the why and how you’ll need to set financial goals. As I mentioned before, if that scary-looking credit card debt jumped out at you with its beady little eyes and sharp teeth, setting a goal to have that paid off within a specific timeframe would be a good start. 

Now is the time to really go through your finances and decide what’s important to you and your wealth-building strategy. The exciting thing about setting goals is hope; hope that you’ll be exactly where you want to be financially one day. 

So, what do you do once you’re done setting financial goals that will help you build wealth? Glad you asked. You’ll create a budget that will help you execute them.

Creating a Reasonable Budget

Step 3: Create a Reasonable Budget

Creating a detailed and realistic budget is KEY to success on your road to building wealth. A budget can be as complex or as simple as you want. However, I would advise that you have a very detailed budget to start. 

The detail may be intimidating or just downright boring, but if you’re new to creating a budget, trust me, it’s well worth it. 

Treat your personal finances like a business. No business, unless they want to go bankrupt, can operate effectively without a budget. A good budget can help you remain focused on all of those goals you set in step two.

Check out 5 easy steps to creating a simple budget for a look at creating a custom budget to fit your needs.

If you’re nervous about budgeting, don’t be. Just take your time, follow the steps in 5 easy steps to creating a simple budget, and crank it out! Trust me, your future, financially free self will thank you for the time and effort you put into kickstarting your financial journey. 

In the words of Mr. Benjamin Franklin, “By failing to prepare, you prepare to fail.” Creating a budget will prepare you for what’s to come on your path to building generational wealth.

Benjamin Franklin Quote

Step 4: Learn to Manage Your Money

I don’t care who you are, if you have money, or if you don’t, not understanding how to manage your money will lead you to the same place….a broke place. 

I’m sure you’ve heard the stories of people winning the lottery only to have spent all of their money within a few short years—also, the entertainers and athletes who ultimately have to file for bankruptcy after making millions. There’s a strong chance that many of those people had no clue how to manage their money. 

Understanding how your money works and how it can work for you is essential to planning your financial future. It’s simply not enough to just earn a lot of money. Without knowing how to KEEP the money, you certainly won’t get far with your goals. 

Fortunately enough for you, I’ve got you covered. Check out this article I wrote on the managing your money.

Learning Money Management

Step 5: Start Investing Now

I’ll be honest, I listed this last only because I wanted you to stick around until the end. So many of us are afraid or have been afraid to invest money. So I listed this step last because I just didn’t want to scare you off right away! 

I personally believe this comes from the many myths and stigmas around investing. 

Statements like, “you need a lot of money to start investing,” or “the stock market is too volatile to invest in,” or my personal favorite, “you don’t need to start investing right now, you’re still young.” I mean, seriously, don’t believe that garbage. I’m here to tell you those statements are FAR from the truth.

Reality Check on Money

The reality is, this is such an important step that it honestly should be listed much higher in the planning process. Investing will help you build and preserve your wealth over time so you can create generational wealth. 

You can work your fingers to the bones for 40 years on a job, earning excellent money, but if you haven’t invested at the end of that time, you will literally have nothing to show for all of your hard work.

And here’s the thing, there are investments that ANY beginner can dive into with very little money to start.

Final Notes

So, do you think you’re ready? Well, I know you’re ready. This 5 step guide to planning your financial future is your roadmap. It certainly may not be easy, but you’ve already taken the first step, which is educating yourself. 

Keep in mind there are many resources available to get you through this process on this very site. Until next time happy planning!

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Krystal Norwood-Morales, MBA, CFEI

Krystal is a Certified Financial Education Instructor and founder of Wild About Wealth, LLC. As a financial literacy advocate, she writes posts geared toward helping others improve their financial education and build generational wealth.


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Krystal Norwood-Morales, MBA, CFEI

Personal finance blogger

As a certified financial education instructor and financial literacy advocate, my mission is to teach young adults how to build generational through financial education. So let’s get WILD about WEALTH!

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