Learn how to create a financial plan that can help secure your future. Our step-by-step guide simplifies financial planning for your goals.
Article: 10 minutes
Updated: September 23, 2026 Published: September 22, 2026
By: USAA Reviewed by: Editorial contributors
Creating a financial plan can feel overwhelming, but it doesn’t have to be complicated. Start by assessing your current situation and setting specific short- and long-term goals like retirement. Next, build a structured budget, work on building an emergency fund, pay down debt, have appropriate insurance in place, and develop a savings plan for your financial goals.
What is a financial plan? It sounds intimidating, but it’s really just an outlined strategy of how you’ll reach your financial goals. If you’re not sure how to get started, this step-by-step guide can help you create a financial plan. But don’t be overwhelmed by these steps. Some of them are very simple, and they don’t all have to be done at once. Nor do you have to do it alone. So, sit down, get comfortable and let’s tackle this topic.
Your financial plan should include both your short- and long-term goals. The outline for how you’ll achieve them can be as simple or as complex as you want or need.
For example, you could write on a paper napkin your plan to save $100 a month to reach your goal of saving $6,000 for a Hawaiian vacation in five years. Congratulations, you’ve just created a financial plan. But that’s just one specific goal. Let’s look at comprehensive financial planning, which touches all aspects of your financial life, not just one goal.
Begin by gathering your financial information, like bank statements, investments, mortgage documents, life insurance documents, credit card statements and things like that. Once you have all your documents together, you’re ready to start building the components of your financial plan.
First, analyze your income and expenses and develop a budget. If you already have one, that’s great. Think of this as an opportunity to see if you’re living within your budget.
One good idea for an initial budget is a 20/50/30 budget:
You can adjust from there, but keep in mind that the goal of any budget is to spend less than you earn. Otherwise, you will be constantly going into debt and it will be next to impossible to reach your financial goals.
Protecting your life, loved ones and possessions is the foundation of your financial plan. Protection through insurance is important because it’s a risk reducer. It reduces the risk of devastating financial hits due to unforeseen events.
For example: Let’s say you are doing a great job of paying down debt, but then you get into a wreck without auto insurance. The cost to repair your vehicle or that of the other driver could easily undo any financial progress you’ve made. It could even set you back further than when you first started.
The same logic applies to life insurance, but on a bigger scale. If progress towards your financial goals would be hindered by the loss of a spouse, that’s a good reason to have life insurance.
Here are a few types of insurance are important to revisit and analyze as part of a financial plan:
One quick note on health insurance: While you can purchase an individual policy on the insurance marketplace, you might find more value with a plan provided and subsidized by your employer. That’s especially true for military members who have access to TRICARE.
Insurance is also important for small business owners.
Next, focus on having an emergency fund. Ideally, that means you have enough money saved to cover three to six months of your living expenses. Don’t get discouraged if you don’t have that much saved. Also, don’t let it overwhelm you if that amount feels like a large sum of money. Set an initial small goal and then work towards your three- to six-month goal little by little.
In fact, the initial small emergency fund should be a higher priority than even paying extra towards debt. Try paying the minimum payment required on your debt until you have a small emergency fund. Then you can continue your debt paydown plan. If you don’t have at least a small emergency fund and an emergency arises, you’ll simply go further into debt, and that’s what we’re trying to avoid.
The next consideration is debt management. Debt can be crippling and extremely stressful. Make a plan to pay down debt and avoid going into more debt.
So, how do you pay off debt? One strategy is to focus on the debt with the highest interest rate. Another strategy is to pay off your smallest balance first, then work your way up. What is the best strategy for you? The one that helps you get out of debt.
Retirement may seem far off, especially if you are just starting out. Maybe you’re at your first job or you’ve just joined the military. But that’s the perfect time to begin saving for retirement.
So, where do you start your retirement planning? Ideally, you begin by envisioning the type of retirement you want. That becomes your goal. Then calculate how much money it will take to accomplish that goal and save for it over your working years.
Starting with a goal can help you make sure you have saved up the money you’ll need for the retirement you want. It takes a lot more money for first-class tickets to travel the world than it does to sit on the front porch watching the grandkids. Plan for the life you want to live.
But it’s OK if you aren’t sure what you want the future to look like. When you’re in your 20s or early 30s, it can be hard to picture. But it’s still important to start saving. Start by saving at least 10% of each paycheck for retirement. Then you can adjust the amount over time.
One of the easiest ways to save for retirement is through an employer retirement plan, especially if they provide a matching contribution. That’s free money you don’t want to leave on the table. That’s the case with military members under the Blended Retirement System, or BRS, when they become eligible for a match of up to 5% of basic pay.
No matter where you are in your career, it’s never too late to start saving, even though the earlier, the better. But even if you’re nearing retirement age, there’s still time to make some adjustments and finish strong.
Part of financial planning is deciding what type of account or accounts will help you achieve your goals. If you’re planning for retirement, you might be thinking about a 401(k), 403(b) or Thrift Savings Plan (TSP), or a Roth IRA versus a traditional IRA. Your decision will depend on the options available to you. However, if you’re saving for a vacation in 12 months, you wouldn’t want to put that money into an investment account that has a potential for loss. With that short timeframe, that money belongs in a savings account. You could even consider a CD.
Next, do a simple calculation of your net worth by subtracting your liabilities from your assets.
Here’s a simple net worth calculation: If you have $1,000 in a checking account, $1,000 in a savings account and a car that is worth $5,000 and you owe $750 on your credit card, you have a net worth of $6,250. The value of your checking account, savings account and the car are your assets, and the credit card debt is your liability.
$6,250 Net Worth = $1,000 + $1,000 + $5,000 - $750
Net worth is important to calculate for a few reasons. You can track it over time to see if it increases, which is proof your efforts are successful. You also can see how much risk you might be exposed to, and why you should protect your net worth with umbrella insurance.
One of the final aspects of your comprehensive plan is estate planning. What happens with your stuff when you die, and is everything set up to pass to your heirs as you desire?
Estate planning can be as simple as having a will and appropriate powers of attorney, and ensuring your beneficiary designations are correct. Learn more about estate planning by exploring these 5 key pieces to an effective estate plan.
Keep in mind that your estate plan needs will grow as your assets do. While a will might be enough for someone who’s young with few assets, it might be insufficient for those with more complex financial situations, especially if there are multiple marriages or blended families involved.
Now it’s time for the hard part: Living by your financial plan. It’s like trying to lose weight: You can put yourself on a diet, but it’s hard to say no to doughnuts. It’s tempting to forget your weight loss plan and just enjoy the moment.
The same logic applies when it comes to managing money. Once you’ve prioritized cash flow to achieve your goals, it needs to stay that way unless a higher priority arises that would cause you to adjust.
We recommend reviewing your plan annually or when major life events occur, like having a baby, getting married or divorced, or changing jobs. These occasions often come with changes in income or living expenses, which might mean you need to adjust your plan.
A change in goals is another reason to revisit your financial plan. If your retirement plans change, revisit your plan. If you change your mind and decide to pay for your children’s education, revisit your plan. If you hit snags in your ability to save for goals or your investments don’t perform as expected, revisit your plan.
One of the best tools for comprehensive financial planning is a qualified financial advisor. They put their experience to work for you, ask questions you might never have thought of and see gaps or risks you might not see. Also, they can help each time you need to revisit your plan based on life changes. But be sure you pick the right financial advisor for your needs.
And your circumstances might lead to a financial plan that includes more complex topics such as special needs trusts or complex tax sheltering strategies.
But most people need to focus on the basics: Spend less than you earn, protect yourself with insurance, and have a plan to achieve your future goals, especially retirement. The key is to just get started and let your financial plan grow with you.