Whether it is about achieving your life’s goals or about running your life smoothly during good and bad times, a good financial plan can be of great help. This is why financial advisor San Ramon always encourages a good financial plan that can get you far. It is the only way one can achieve financial security and avoid any kind of surprises that might burn a hole in your pocket.

So, if you are thinking of how to do proper financial planning, then here is a complete guide that can help you. It contains everything that you should know about planning your finances and achieving your end goals.

How to make a proper financial plan?

If you have no idea about how to start with a proper financial plan, here are a few steps that you can follow.

1. Setting up a goal

To create a financial plan, you need to have a goal that you want to achieve shortly. If you wish to buy a house or a car or you’re just looking for early retirement, you can focus on saving up better and come up with a practical plan to achieve that goal of yours.

Your financial goal is supposed to motivate you. It could be anything from a better lifestyle to putting your kids in t your dream school.

Make sure that you set up a financial goal that inspires you to make your dreams into reality.

2. Monitor your expenses

To create a good financial plan, you need to understand your expenditure and know where most of your money goes.

This is pretty easy to do. You can download a notes app on your phone or keep a small notepad to yourself. So, whenever you make an expenditure, make sure that you write that down and make a note adding what you spent for and how much you spent.

Do this for a week and then create a category and put your expenditures into those categories. It could be divided into rent, clothing, entertainment, groceries, etc. This way, you can monitor what your immediate and crucial expenses are and where you can save.

3. Be prepared for emergencies

It’s undoubtedly true that trouble doesn’t come knocking. There can be times of emergency when you would be loaded with expenses of your medical and hospital bills. Or it could be related to mortgage or rent.

So, you need to be prepared for emergencies as you can’t put everything on your credit card, as it will eventually lead to debt. This is why it is essential to keep some cash away in case of any emergencies. You can always start by putting away smaller amounts and gradually move towards bigger numbers. This way, you can shockproof your entire budget and be prepared for emergencies.

4. Work on paying your debts

The worst time to start with a financial plan is when you are under debt. When you are under debt, it can impact your credit score if you have to make monthly payments. So, it is always the best idea to pay your debts before moving on towards creating a financial plan. Once you become debt-free, things get much easier.

5. Save more

The key to any sound financial plan is controlling the outflow of your cash. We all love to spend on things that make us feel good during tough times, such as spending lavishly on shopping, eating out or weeks, or any other guilty pleasure. It does not matter if you earn a lot. It’s never a good thing to not monitor your expenses.

So, if you are getting monthly paychecks, make sure that you are spending it on essentials and controlling on spending on your guilty pleasures as much as you can. If you want to spend on some entertainment or things like that, you can try to take out some percent of your income to spend on that.

6. Create an investment plan

The most important part of a financial plan is an investment. You need to invest money so that it can work for you and give you returns. But investment should not be rushed into. You need to measure the risks and the goal that you want to achieve through investment before putting your money into stocks, startups, or real estate.

Know when you will need money. It could be in 5 years or less. Or it could be a long term goal. If you want to see your money grow, you have to make strong commitments. If you have a short term goal to achieve, you can use a savings account.

7. Don’t forget about the taxes

Your financial plan shouldn’t exclude the taxes, as they will play a major role in it. While making long term plans for your income, you must include the taxes. If not, it can impact your cash flow big time.

For this part, you can take advice from a financial planner or an accountant. This way, you can ensure that your financial plan includes taxes.

8. Tracking the plan and the exit strategies

You need to track your plan annually. If your income flow changes or your goal changes, the plan will be directly hit. Also, you need to make sure that everything is going according to your plan. So, it is important to review your plan annually or every six months.

Moreover, you need to be prepared for an exit strategy to accomplish any of the goals you have made, whether it is buying a house or saving up for your retirement or other personal or family expenses.


Proper financial planning requires you to commit to your goals and keep every expense and cash flow under check. In the end, it is about you and how your finances can support your dreams and goals. This is why a good plan is necessary. Planning for ahead can help you live in the moment when your financial plan has got you covered.