What is a financial plan?
A financial plan is a comprehensive overview of your current finances, your financial goals, and any strategies you have set in place to achieve those goals. Good financial planning should include details about your cash flow, savings, debts, investments, insurance and any other elements of your financial life.

What is financial planning?
Financial planning is an ongoing process that looks at your entire financial situation to create strategies to achieve your short and long-term goals. It can reduce your stress over money, support your current needs, and help you build a nest egg for goals such as retirement.

Creating a financial plan is important because it allows you to maximize your assets and gives you the confidence to weather any bumps along the way. You can create a financial plan on your own or you can enlist the help of a financial planner. Online services like robo-advisors have also made getting help with financial planning more affordable and accessible than ever before

The 9 steps to financial planning are:

1. Set financial goals
A good financial plan is guided by your financial goals. If you approach your financial planning from the perspective of what your money can do for you – whether it’s buying a home or helping you retire early – you’ll make saving more conscious.

2. Track your money
Get an idea of your monthly cash flow – what goes in and what goes out. An accurate picture is key to creating a financial plan and can reveal ways to put more money toward savings or debt repayment. Understanding where your money goes can help you develop short, medium and long-term plans.

3. Budget for emergencies
The cornerstone of any financial plan is setting aside cash for unexpected expenses.

4. Dealing with high-interest debt
The most important step in any financial plan: pay off high-interest debts such as credit card balances, payday loans, title loans, and foreclosure rentals. Interest rates on some of these can be so high that you end up paying back two or three times what you borrowed.

5. Retirement Plan
Save now to secure a government-independent retirement.

6. Optimize your finances with tax planning
For many of us, taxes take center stage during tax filing season, but careful tax planning means going beyond the standard tax report you file with the IRS each year.

7. Invest to build your future goals
Investing may seem like something for rich people or those who are already confident in their careers and family life. No. Investing can be as simple as putting money in a 401(k) and as easy as opening a brokerage account (many have no minimum to get started). Financial plans use a variety of tools to invest for retirement, home or college.

8. Develop your financial well-being
Increase your investment portfolio and savings over time.

9. Estate planning: protect your financial well-being
Financial planning also means taking care of your future needs, as well as planning things for your loved ones. Making a will can help ensure that your assets are distributed according to your wishes. Other types of estate planning documents can also give your relatives clarity about how you would like to be cared for and who should manage your affairs.