10 Personal Financial Planning Tips You’ll Actually Use

This is the moment. You’ve thought about it for a while, but now you’re 100% certain: It’s time to finally take control of your money. First things first…congratulations! Deciding to change is the first (and hardest) step. The second step? Don’t worry, that’s what this article is here to help you with. Let’s jump right into 10 personal financial planning tips that you’ll actually use.

What is financial planning, and why is it important? 

Financial planning is the process of evaluating your financial situation, identifying goals, and creating a plan to achieve them. Comprehensive financial plans often include multiple branches of your finances, like savings, investments, taxes, and retirement.

Creating a financial plan is important because it lets you know where you currently stand and what changes you need to make to reach your goals. Without a plan in place, it’s much harder to make progress towards your financial goals. 

👉 If you’re ready to build a step-by-step financial plan, check out our detailed guide on how to create a financial plan in 12 steps.

Top 10 financial planning tips to take control of your money

Building a comprehensive financial plan is a complicated process that can sometimes require professional help. Luckily, there are plenty of simple financial planning strategies you can start using today. Here are a few of our favorites.  

1. Brainstorm your money goals: Creating a starting point for your journey

Why does trying to master your money feel so daunting? Mainly because “money” is such a broad topic! Taking control of your finances could mean so many things. Creating a budget. Saving. Investing. Building credit. These all play a part in your personal finances.

So where do you start? 

One option is to answer this question: What money goals are most important to you? This will give you a good starting point.

Here are a few of the most common money goals to consider:

1. Creating a monthly budget

2. Saving or investing for the future

3. Paying down debt

4. Improving your credit

5. Break the paycheck-to-paycheck cycle

Think long and hard about what goals you want to achieve. Then, keep your goals in mind as you read through this article.

2. Build the basics of your budget

Almost all money goals boil down to mastering 1 task: Budgeting. 

If your budget isn’t balanced, then it’ll be difficult to save, invest, pay down debt, and reach other financial goals. 

At its simplest, budgeting is about spending less than you earn. To create a rough budget, add up your monthly expenses and make sure they’re lower than your income. If necessary, look for expenses you can cut until your monthly sum is lower than your income.

Learn more about budgeting in our detailed guides:

• How to Create a Monthly Budget in 8 Steps

• 10 Budgeting Strategies and Methods: Find Your Best Fit

Your budget is the foundation of your personal finances. Without a strong foundation, the rest of your house could crumble. 

3. Work on your emergency fund

Before tackling larger goals (like saving for a house), it can be a good idea to create an emergency fund. An emergency fund is cash set aside for life’s unpredictable expenses (you know, the ones that always seem to pop up with the worst timing).

Your emergency day fund is crucial to financial stability. It helps prevent small, annoying expenses from spiraling into major setbacks. Emergency funds come in handy for:

1. Protecting you from high-interest debt: An emergency fund can help cover unexpected expenses so you don’t need to rely on a credit card.

2. Giving you stability during unemployment: An emergency fund can help pay your bills if you lose your main source of income. This way, you won’t need to jump on the first job offer you get. 

3. Securing your long-term goals: An emergency fund can help provide a buffer so you’re not constantly dipping into your savings every time something comes up.

4. Tackle high-interest debt

Another one of the most common personal financial goals is to pay down high-interest debt. High-interest debt, like credit cards or payday loans, can grow very quickly. If you’re not careful, it’ll keep you buried under interest and minimum payments, making it even harder to save.

Think of high-interest debt like a weed in your garden: It’s smart to stamp it out quickly, before it grows out of control.

5. Start (or add to) a retirement plan

Once they’ve got a handle on their budget, savings, and debt, many people will turn their attention to retirement planning.

In a nutshell, a retirement plan is just an investment account that has special tax advantages. Retirement accounts work like this:

1. You open and contribute to a retirement account

2. That money gets invested and grows

3. You withdraw the money when you’re ready to retire.

👉 How to Start a Retirement Fund

6. Understand how to use a credit card

Credit cards can be valuable tools that offer spending flexibility, rewards, and even fun perks like airport lounge access or built-in insurance. But credit cards are also a bit like playing with fire: You can get burned if you’re not careful.

It’s important to understand the best practices when managing a credit card so that you understand how to use one responsibly. When you’re feeling ready, start exploring the perfect credit card for you.

7. Check your credit score and build a plan for improving it

Your credit score is a metric that describes how likely you are to pay a loan back on time, based on your past spending behavior. 

Lenders will look at your credit score to determine whether or not to approve you for a loan or credit card. The higher your score, the easier time you’ll have getting approved.

You can improve your credit score over time by using credit responsibly, paying your bills on time, and paying off outstanding debts. You can also track your credit-building progress easily by downloading the MoneyLion app.

8. Explore a side hustle to help reach your goals

There are typically 2 ways to reach financial goals:

• Option #1: Cutting your expenses 

• Option #2: Increasing your income 

For example, if you want to save $200, then you’ll likely have to cut out $200 worth of expenses. Or, you can also try to increase your income by picking up a side hustle. This is a great option if you don’t have a lot of wiggle room in your budget and don’t mind a bit of extra work. 

A side hustle can help expand your income and make it easier to reach your financial goals, making it one of our favorite personal financial planning tips.

9. Create a check-in calendar 

Another key part of your money journey is to create a check-in calendar so you can routinely monitor your progress and make adjustments as needed. Weekly or monthly is a good cadence, although some people prefer to do daily as well.

Remember: Setting goals is the easy part. But committing to your goal and tracking progress? That’s the real challenge. 

10. Budget for both your physical and mental health

Data from the Financial Health Network shows that finances are one of the leading causes of stress, especially for women, younger individuals, and lower-income households. It’s important to keep this in mind on your journey to master your money.

Implementing financial planning tips is important, but it shouldn’t come at the expense of your mental health. If you find yourself cutting out every single expense to the point where your stress is spiraling, then it’s probably worthwhile to take a step back. 

Just like with almost everything in life, balance is key.

If you need support throughout your journey, you can also lean on MoneyLion for a sense of community. The MoneyLion Community features daily discussions around saving, debt, and general financial wellness. Our members routinely share tips, thoughts, and personal insights about their own struggles and successes. 

Personal Financial Planning Tips: Take Control of Your Money with MoneyLion

Taking control of your money is about slow, steady progress. Not perfection.

One way to lay the foundation for long-term stability is by establishing clear goals, mastering your budget, and saving up an emergency fund. Once you’ve conquered that, you can move on to bigger goals like building your credit score or opening a retirement account. 

Need help taking control of your money? MoneyLion makes it easy with tools for budgeting, credit monitoring, and personalized insights, all in one app. 

Download MoneyLion today and start building the financial future you deserve.

FAQs

What are some key components of financial planning?

Some key components of financial planning include setting money goals, creating a budget, paying off debt, and saving for the future. It’s also important to set regular follow-ups so you can check in with your goals, monitor your progress, and adjust as needed. 

How can I get started with basic financial planning? 

If you’re feeling overwhelmed, it’s best to start small. Get the ball rolling by achieving one small money goal, like building a simple budget or tucking away some cash for emergencies. Then, keep the momentum going by tackling larger goals.

What is a financial plan? 

A financial plan is the process of assessing your financial situation, brainstorming goals, and developing strategies to achieve those goals. Your financial plan can live anywhere, whether it’s on a spreadsheet, on a piece of paper, or in an app. 

How do I create a personal financial plan?

You can create a personal financial plan by listing your top money goals and creating a plan to achieve them. This typically involves creating and sticking to a budget, paying down debt, setting up an emergency fund, and creating a savings or investment plan.

What is the difference between wealth management and financial planning​?

Wealth management involves protecting wealth that you’ve accumulated through investing and diversification strategies. Financial planning focuses more on building wealth through budgeting, saving, and paying off debt.