Putting It All Together

“The financial advice market presents an impossible conundrum: in order to work with a financial planner, you must have enough money to be of interest. In order to amass enough money, it is critical to work with a financial planner. Most financial plans come with a $1,500-$3,000 price tag – numbers that are simply out of reach for most Americans.” 

– Alexa von Tobel

Creating Your Own Money Plan 

You face many financial decisions in life. 

    “Do I buy a house now or continue to rent?”

    “Do I pay off all my student loans right away or begin saving for retirement now too?”

    “Should I lease or buy a car?  Is pre-owned better than brand new?”

    “Can I afford to go to the bachelorette party AND go to the wedding?”

How do you answer these questions? Investopedia states that “there is no specific template for a financial plan” but offers a broad definition here:

         A comprehensive evaluation of an investor’s current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans.

The people that can afford it, work with an investment or tax professional and use current net worth, tax liabilities, asset allocation, and future retirement and estate plans in developing the plan.  These will be used along with estimates of asset growth to determine if a person’s financial goals can be met in the future, or what steps need to be taken to ensure that they are. 

Hiring a professional is expensive, and often you already need a decent chunk of money to even get started in investing. If you aren’t ready to hire someone to create your plan, you can develop your own plan now.  This way, you get to know what you should be doing now.  A simple plan is a list of goals and ways of getting there:

To create this plan, you by start by understanding your long-term financial goals and your resources.

Time value of money – Cost out your Goals:

As you saw in our section on the time value of money, investments compounding over time have a big impact on future goals, but so does inflation.  Those factor in on these long-term goals: 


Many investor sites offer free calculators that factor in return on investment and inflation.  The results allow you to estimate how much you need to save now to be able to fund a reasonable retirement, but remember it’s not a guarantee.  

Life insurance 

If you have children, you should have insurance. If anything happens to you, your loved ones will be financially secure.


If you have children who hope to go to college, or if you plan to return for a new degree, you can find websites that help you estimate what you need to save now.

You may have other goals as well, such as buying a home.  And you will want to create an emergency fund.  Put these all in order of priority on one side of the plan you are sketching out. 

Every dollar has a job – Use all your Resources

You learned in our section “Every Dollar Has a Job” that you need to account for all of your resources.  These include the income you earn, credit card awards, tax refunds and company benefits. 

List these on the other side of the plan you are sketching out. 

Woke money is smart money – Have a Plan

The art of creating a workable plan is to mesh the goals with the resources in the best way.  If your situation is complex, you may want advice from a professional. Some websites offer free tools, like the budgeting tool on Learnvest, and offer financial advice at a more affordable price than traditional financial advisors.

In the end, your plan will remind you what to do so you improve your finances.  Here is a sample list:

  • ‍Maximize my 401(k) contributions,
  • Set up and contribute to a Roth IRA from my side gig,
  • Add to my emergency fund,
  • Monitor my credit rating,
  • Steer clear of any major credit card debt,
  • Review my beneficiary designations at work,
  • Sign a medical directive and durable power of attorney, and
  • Save enough for a fun (not too expensive) vacation next summer!

It doesn’t matter how many pages or what the plan looks like; what matters is that you learn from reviewing your finances and change how you manage your resources so that you improve your finances.  A simple list on a Post-It is a great plan, if you follow it!