Do you have a financial plan? Most Americans do not. Unfortunately, the idea of developing a financial plan may seem overwhelming for many. But it may feel more manageable by breaking it down to its most basic components. Here are the five steps of the financial planning process and what they mean for you. 

1. Gather Information

The first step is to gather together information about all your assets and liabilities. You can't make a realistic, effective plan without all the information in front of you. This step can be challenging for many, so an objective financial pro may be able to help take the pressure off you. 

2. Make Financial Goals

What do you want to accomplish with your money in the future? Make three different types of goals: short-term, medium-term, and long-term. An example of each might be to save $1,000 in an emergency fund, to fund a big anniversary trip, and to fund your retirement. 

Research how much you estimate you will need to accomplish these various goals. And consider prioritizing them within each of the three aforementioned categories. 

3. Manage Current Money

How well are you managing your current income and expenses? Many people hate to budget and feel like they can't do it. Think of it more as money management rather than just a budget. By looking at both sides of the equation — raising income and lowering expenses — you can find a workable balance. 

4. Plan to Reach Goals

To reach those goals you created earlier, formulate a plan for each of them. How much can you put aside for each goal? Where will you keep that money? Can you automate savings? What rate of return do you need? What level of risk do you tolerate? And what timeline do you want to reach goals in?

5. Check in and Make Changes

Financial planning is not something you do once and forget about. Your life is always changing, and your plan should also evolve. 

What might you revisit? Continue to tweak your current money management plans and track your progress toward various goals. Decide on the next priority as you near a goal finish line. Or, if your interests have changed, switch old goals with new ones. 

Where to Start

Want help getting started with any or all of these steps in financial planning? The best resource you'll find is a financial advisor in your state. With their tools and knowledge, they'll help you overcome any fears and take control of your financial life.