Build your own financial plan: A step-by-step guide

Part of our Build your own financial plan series

Photo of a woman creating a financial plan.

This series of how-to articles makes it easier to create a personal financial plan and get your money in order. In 9 steps, you have a nice framework to build on for the rest of your life. 

You may have already completed all 9 steps, and you're just revisiting them here. Maybe you haven't started yet, or you missed a step. Don't worry. We’ve put it all in one place for you. Just start with one task and keep going. (Or rip the bandage off and tackle the whole thing on a long, rainy weekend with a big pot of coffee and a dog at your feet.)

Either way, here’s what you can do to make your own financial plan, step-by-step.

Set financial goals

It’s always good to have a clear idea of why you’re saving your hard-earned money. Think it through using our financial goals worksheet (PDF).

Create a budget

Consider this your monthly cash flow and savings/investing plan. Give yourself permission to decide where and how to send your money with our budgeting worksheet (PDF).

Tax planning

It can go a long way toward helping you keep more of your money next year. Our tax planning worksheet (PDF) will help you think through potential income tax credits and deductions.

Create an emergency fund

All the planning in the world won’t help if life throws you a curveball and you’re not prepared financially. That’s where an emergency fund comes in handy.

Manage debt

Understanding and managing debt is a key part of creating a financial plan. Use our debt management worksheet (PDF) to log your numbers and find the right balance.

Finished? Here’s when you should review your financial plan.

Take a fresh look at least once a year or after a big life change:

Tip: Around age 50, you may want to include long-term care insurance and expand your plan to add income in retirement.

Protect with insurance

Life can change in an instant. People with a good financial plan hope for the best, but plan for the worst. Insurance helps with that. Use our disability and life insurance worksheet (PDF) to log your coverage.

Plan for retirement

Even if it’s a long way off, think about what you want your money to do for you when you retire, and create a plan to make it happen. Our retirement savings checklist (PDF) will help.

Invest beyond your 401(k)

To reach your mid- and long-term goals, take your savings strategy and put an engine behind it. That’s what investing can do.

Estate planning

You don’t have to be wealthy, old, married, or a parent to need an estate plan, which also lays out who makes financial and healthcare decisions for you if you can’t make them yourself.

Next steps

  • Would you rather have a financial advisor create your plan? If you don’t have an advisor, find one near you.
  • Share your story. If you’ve successfully built your financial plan and are willing to talk about your experience, please email us at editor@principal.com.

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

Insurance products and plan administrative services provided through Principal Life Insurance Co. Securities offered through Principal Securities, Inc., 800-547-7754, member SIPC and/or independent broker-dealers. Principal Life, and Principal Securities are members of the Principal Financial Group®, Des Moines, Iowa 50392.

Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.