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By Jill Schlesinger
November 15, 2016

We all know that we should create a thorough, comprehensive financial plan. But for some — especially those who are just starting their financial journeys — that notion is so daunting that they simply blow it off.

To help you focus on the issues that need attention, here are some questions to ask yourself:

What is your biggest financial concern? This could be something like paying down student loans; saving for a short-term need, like a rental security deposit or down payment for a car; or targeting a longer-term goal, like saving money for a house, putting money away for a kid’s education or contributing to retirement. Once you’ve identified it, make that a priority.

Do you track where your money is going? All financial planning roads lead to cash flow. Only by tracking what is going in and what is going out will you be able to determine how to achieve your financial goals. Apps like Mint, You Need a Budget, Digit or even your bank’s tracking software have made this process so much easier. Pick one and learn where your leaks are.

How much money do you have saved? Do you have any debt? When you detail what you own (assets) and what you owe (liabilities), you can create a balance sheet. This can be especially helpful if one of your main objectives is to pay down outstanding debt. Be sure to list all of the interest rates associated with your obligations and when/if they have maturity dates.

How much can you contribute to a retirement plan? For most of us, using an employer-based plan is the path of least resistance, but there are easy ways to automate your retirement contributions using your own traditional or Roth IRA. Either way, look for ways to be more aggressive in your savings. The earlier you start, the easier retirement planning becomes.

Ultimately, your three-minute financial plan should help you start tackling the three pillars of planning success:

  • Paying down consumer and then student loan debt
  • Establishing an emergency reserve fund (6-12 months before retirement and 12-24 months after retirement)
  • Maximizing retirement contributions
Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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