How to Make a Plan for Your Finances You Can Stick to

Whether youre trying to get out of debt, save for retirement, or accomplish any other financial goal, you need a planbut it cant be just any plan. If it doesnt work for you, it simply wont work. Making a plan you can stick to takes several steps:

1. List your current monthly cash flow, and bills, and 1, 3, 5, and 10 year goals

Before you do anything else, make a quick list of all your goals. This is also a good time to start tracking your spending and list out any debts you might have.

2. Prioritize your goals

Most people don’t have the resources to fully fund all their goals at the same time. Instead, think about which of your goals are most important to you and which are the most urgent.

3. Break up big goals into smaller ones

How do you eat an elephant? One bite at a time. Dividing up a huge goal gives you more victories to celebrate, and also makes the goal feel more real. Overall, it makes you a lot more likely to succeed.

Retirement, for example, takes decades to save for. What will you do this year to work toward it? How much money will you put away this month? Those are much easier questions to answer, and once you set such specific goals youre more likely to meet them.

4. Keep your goals realistic

It’s better to meet a good goal than fall short of a great one. If you do a thorough job on the first two steps above, you’ll have all the info you need to create workable, realistic goals.

5. Keep your financial goals flexible

If you dont have enough money to meet your goals, youll need to tweak your plan further. You might need to change some of your money habits, or adjust your goals, or both.

As you adjust your plan, look for inspiration everywhere. Learn from friends, keep reading, and dont be afraid to test things out in your own life. And remember, every dollar counts. Even $5 per week adds up to $260 in a year.

6. Examine and readjust.

Once youve put your plan in motion, keep an eye on it to make sure it runs smoothly. Its good to revisit your goals a couple times a yearto tweak them or just inspire yourself. And as new opportunities arise, look for ways to use them to your advantage. Before long, youll be well on your way toward meeting your money saving goals.