Diving into the process of life or financial planning can be a daunting task, as there are many components to consider when tackling the idea of creating long-term goals and ensuring security for one’s family. There’s budgeting, saving, retirement and college savings accounts, along with items like insurance and the idea of utilizing professional help to pull it all together. Where should one start and what are some of the key considerations to work through in creating a plan?

Taking stock and creating a detailed budget is a key first step

Virtually every expert will note that putting together an initial budget is the first step to creating a viable financial plan. Money Crashers details that there are a handful of specifics that need to be pinned down in creating a working budget, such as how much one is currently making, what assets one has, and what one owes in terms of debt. It is also critical to be able to lay out one’s monthly expenses, and spending a month or two tracking expenditures can be a valuable step in determining where one’s money is going and where changes need to be made.

Covering all of the fixed expenses comes first, but it is important to put together a strategy to save money as well. These savings may need to be reserved as emergency funds, as money to be put toward big expenses like a wedding or a new home, or funds that will be invested to save for retirement or a child’s college education.

How much should one strive to save and where should the money go?

How much does one need to budget for these various savings funds? Suggestions vary, and as Forbes notes, there is no one-size-fits-all approach to this. Setting aside at least 10 percent of one’s income is a good place to start, but some would say that one’s goal should be more in the range of 20 percent. Of course, it is better to start with a small amount as soon as possible and work up from there, rather than to put the process off entirely.

In addition to stashing away savings, it is wise to start considering retirement savings options as soon as they become available. Many employers offer the opportunity to contribute to a 401(k) or similar plan, and most experts recommend utilizing this option fully. Employers often provide disability and life insurance as well, and while these can feel unnecessary to a young employee, taking advantage of these types of coverage can be valuable ways to ensure that one’s family is covered if something unexpected and catastrophic arises down the road.

When it comes to planning for a child’s college education, a 529 savings plan may be a good fit. The U.S. News & World Report shares that a 529 plan provides the opportunity to save money for a child’s college while getting the opportunity to utilize some tax benefits. This has become a popular way for people tackling long-term life planning to prepare to help a child with higher education costs down the road and if paying for college is part of one’s long-term life planning strategy, starting a 529 plan is definitely an approach to consider.

What about hiring a financial planner?

Some people may turn to a certified financial planner for assistance in working through these kinds of questions, and that is a wise choice for many who are looking for guidance and expertise. Whether one uses a financial planner or not, experts emphasize that long-term financial success can be attained when one takes the time to assess their situation and formulate a plan.

Tips for life planning success include taking stock of expenses and putting together a detailed budget, taking advantage of opportunities to save and invest, and making sure to utilize all of the planning options available such as insurance, 401(k) plans, and perhaps a 529 plan if a child’s higher education needs are part of the equation. Tackling the process of putting together a detailed life or financial plan can be an intense experience, but starting early and sticking to the plan can ensure long-term success.

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