How to Create a Financial Plan

According to Charles Schwab's 2025 Modern Wealth Survey, only 31% of Americans have a written financial plan. Since October is Financial Planning Month, what better way to recognize the occasion than to present tips to help you create your personalized financial plan?

1. Set your goals. What are you saving for?  Do you want to buy a house, retire early, or attend college? Once you know your goals, you can develop a plan.
2. Assess your current financial situation. Gather your income, expenses, assets, and debts. A net worth statement provides a snapshot of your financial picture.
3. Create a budget. A budget is a detailed analysis of how your monthly money is collected and spent. It can help you track your income and expenses, ensuring you are not paying more than you earn. Many different budgeting methods are available, so find one that works for you and stick to it.
4. Pay down debt. Debt can be a significant financial burden. Prioritize repayments to minimize your debt as much as possible. Since credit cards typically have the highest interest rates and can result in a revolving balance, they should be your priority. If you have other loans with fixed interest rates and payments, such as auto or mortgage loans, consider chipping away at those as well.
5. Save for an emergency fund. An emergency fund is a savings account that you can use to cover unexpected expenses, such as a job loss or medical emergency. Aim to save at least three to six months of living expenses in your emergency fund.
6. Invest in your future. Once you have paid off debt and built an emergency fund, you can start investing for your future. Investing can help you grow your wealth and achieve your financial objectives. With numerous investment options available, it is crucial to research and select investments that are suitable for you.
7. Review your plan regularly. Your financial situation will inevitably change over time, so it's essential to review your financial plan periodically and make adjustments as needed. This will help you stay on track to reach your financial goals.

Here are some additional tips for creating a financial plan:

• Be realistic. When setting your financial goals, ensure they are honest and achievable. Don't try to do too much too soon.
• Be specific. The more precise you are about your financial goals, the easier it will be to create a plan to achieve them. Instead of saying, "I want to save for retirement," say, "I want to save $1 million for retirement by age 65."
• Be flexible. Things change, so your financial plan should be flexible enough to change with them. If you experience a significant life event, such as a job loss or a divorce, you may need to adjust your financial plan accordingly.
• Seek professional help if needed. Consider working with a financial advisor if you struggle to create a financial plan. A financial advisor can help you assess your financial situation, set goals, and make a plan to achieve them.

Creating a financial plan is a crucial step in achieving your financial goals. To learn about the savings account options available at NASB, call 800-677-6272.