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Today is a good day to start your financial plan

Even for goals that seem far off, it's never too early or late to begin financial planning.

A plan is essential for navigating any path. Your financial plan is vital to helping keep you on track to achieve a lifetime of financial success.

Many people mistakenly believe that a financial plan includes only investing for retirement. While saving for your golden years is an integral component of any financial strategy, you shouldn't forget other fundamental financial plan items: establishing a budget, setting financial goals, investing early and regularly, estate planning, and saving for college.

Establish a Budget

A budget is the key to managing your spending and saving. If you don't follow a budget, you're likely spending more than you realize, and saving less than you could be.

Begin by tracking your spending for a month. The easiest way to do this is by going about your life as usual, writing down every bill you pay and item you buy, from groceries to your daily coffee. At the end of the month, compare what you earned with what you spent. Ask yourself: Were all my expenditures necessary? Did I live within my means? What can I cut out, or at least cut down on?

Next, prioritize your expenses and needs. Obviously, some expenses are fixed, like food, housing, and utilities. But when it comes to your other "needs," figure out what you can do without — but be rational and reasonable. You can't cut out every seemingly unnecessary expense; a luxury-free budget is about as sensible as no budget at all. And completely depriving yourself of all treats could set off a seriously budget-damaging spending spree.

Set Financial Goals

Your budget will be easier to follow if you have financial goals that are important to you. In the short term, you may want to pay off credit card debt, buy a new car, or take a vacation; your long-term goals might include saving for the down payment on a home, retirement, or your children's college tuition.

Once you've identified your goals, give yourself a timeline for achieving them. You'll then know how much of your budget to set aside each month, and the wisest investments to choose.

Review your goals periodically so they're always fresh in your mind. If you go off course, don't get frustrated and give up. Simply reassess and continue working toward your goals.

Save Regularly - Even Small Amounts

Saving early in life is definitely advantageous because your money has more time to compound and grow. But it's never too late to make saving a new habit.

Many people don't believe they have enough money to become savers. But you don't have to save a large amount of money initially, or regularly. It's perfectly fine to start slow and small and stay small while you adjust to your new financial habit. If you're able to, have the money taken directly out of your paycheck — you probably won't even miss it.

Your savings plan should include a strategy for increasing your contributions. After a few months of investing, when you've adjusted to living on less money, boost the amount you're saving up just a percent or two. You can also look for ways to save lump sums of money, such as when you get a bonus, a monetary gift, or your tax refund.

Estate Planning

According to a poll by Gallop©, only 44% of Americans have a last will and testament, and even less have other estate planning documents in place, such as a trust or a power of attorney for financial or health care matters. Many people think they don't have enough money or possessions to worry about; however, an estate plan should be an essential part of any financial plan.

A will is a good place to start. Your will ensures that your assets, such as your possessions, home, other property, savings, and investments, are passed on according to your wishes after your death. If you die without a will — called dying intestate — your assets and possessions will be distributed according to your state's law. Chances are, your state will not share your intentions for dividing up your assets.

Your estate plan should also include a living will, which addresses the health care measures you would or wouldn't like taken if you're ever unable to make such decisions for yourself.

Planning for Your Child's Tuition

Most parents would love to pay for their children's college education, but some may not think they could ever save enough to cover the ever-increasing cost of higher education. Thankfully, the federal and state governments have options for funding your child's education, such as the Coverdell Education Savings Account, education savings plans, or custodial accounts under the Uniform Gift to Minors Act (UGMA) or the Uniform Transfer to Minors Act (UTMA).

If you consciously make college tuition planning part of your financial plan, along with budgeting, estate planning, and saving, you'll stay on the right path toward achieving a lifetime of financial success.


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