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Use This Financial Plan Example to Guide Your Future Planning

A financial plan can provide you with a road map to help manage your money and meet your short-term and long-term financial goals.

Chris Scott

Contributing Writer at Tally

November 12, 2021

If you're looking to improve your financial management, one of the first places to start is with budgeting. And once you get that budget in place, it’s wise not to stop there. Your budget will become a fundamental part of your overall financial plan. 

In this article, you’ll learn everything you need to know about financial plans. Specifically, what a financial plan is, why it's important and what it includes. 

From there, you’ll walk through how to set up your own financial plan using a few financial plan examples you can implement into your money management strategy. 

What is a financial plan? 

A financial plan covers everything relevant to your personal money management. It tracks your: 

  • Assets, which are things you own 

  • Debts, which are things you owe 

  • Budget

  • Financial goals

  • Strategies you intend to use to reach your goals 

As you can see from the above list, a budget is just one aspect of a financial plan. A budget strictly measures your cash flow and income versus your living expenses, holding you accountable so your "money in" is greater than your "money out." A comprehensive financial plan takes this even further, tracking your balances and goals. 

Why is a financial plan important? 

A financial plan may not seem important, especially if you already have a budget in place. However, setting up one of these plans can help you manage your money and work toward financial goals. 

Here are a few reasons why a financial plan is so important: 

A plan offers a clear vision of your future 

Because your financial plan defines your short-term and long-term goals, you can hold yourself accountable when making financial decisions. Essentially, the plan offers a road map to managing your funds. It allows you to prepare for certain life events, like the down payment on a house or the purchase of a new car.

Your retirement plan will probably also be included as one of your long-term goals. Even if retirement seems a long way away, it's smart to start saving for retirement sooner than later. Putting your money into investment accounts can help you grow your nest egg for when you retire. 

The age you’d like to be when you retire is something else to keep in mind, as that will determine how much you need to have stored in your retirement accounts.


A plan can reduce the likelihood of taking on new debt 

Your financial plan can also help you build and maintain a rainy day or emergency fund. Without one of these funds in place, you may have to put unexpected expenses — like new tires for your car or medical bills — on a credit card. This could lead to increased credit card debt. A solid financial plan will help you build your net worth and decrease the likelihood of having to take on credit card debt.  

Successful businesses use financial plans  

To further demonstrate why personal financial plans are important, consider how some of the most successful companies have financial business plans in place. The Small Business Administration (SBA) states that a good business plan guides companies "through each state of starting and managing (a) business" and is used "as a roadmap for how to structure, run and grow (a) new business." 

The individual components of a business plan are a little bit different, as companies may include formal documents like balance sheets, financial statements or cash flow statements. That said, the nuts and bolts remain the same. If a business plan is a critical component in the growth of a new company, it's easy to see why the financial planning process plays an important role in your personal finances

What does a financial plan include? 

A financial plan may include the following components: 

  • Your age and tax filing status (single, married filing separately, etc.)

  • Your income 

  • Your current assets 

  • Your current liabilities (debts) and the interest rates you’re paying 

  • A debt repayment plan 

  • An overview of your short-term and long-term financial goals 

  • Your investment plan 

  • Your general risk tolerance 

  • Information about your insurance, such as your personal life insurance or your long-term care insurance 

  • Your estate plan 

As you can see, your financial plan provides a detailed guide to help you manage your finances. 

How can I set up a financial plan? 

To set up a financial plan, you can start by compiling the items listed above. Creating a worksheet is a great way to track this information. If you’re married or have a partner you share joint finances with, you can complete this activity together. 

There are countless financial plan templates available online and they’re typically solid starting points. Remember: your financial plan is unique to you. What works for one person may not be the right financial strategy for you, and vice versa. Feel free to customize financial plan examples to better meet your goals, objectives and current financial situation. 

It's also worth noting that financial advisors and financial planners are available to help. These professionals can evaluate your current financial situation and help you come up with a plan that meets your short-term and long-term goals. They can also help with more nuanced topics, like defining beneficiaries as part of the estate planning process or securing life insurance coverage.

When you consider the fact that financial illiteracy cost Americans an average of $1,634 per person in 2020, the fee you pay a financial advisor may be well worth it. Advisors can provide expertise and help you put yourself in a position to have a successful financial future.

Lastly, make a point to check in on your financial plan from time to time. Set a calendar reminder, perhaps every quarter or every year, to review your plan. The information in the report can change, for example, you could receive a raise at work, pay off one of your credit card balances or start putting more into a savings account. It’s important to adjust your financial plan to accurately reflect your current financial situation. 

Financial Plan Examples

Each person’s financial plan will look different, depending on what needs to be tracked. But here are a few financial plan examples you can use for inspiration that might help map out how your personal financial plan could look.

Net Worth Summary Example

Your net worth is a summary of all of your assets minus your liabilities. 

Here is what this might look like on your financial plan.

Income Summary Example

Your income summary is where you list all your income sources to see, at a glance, how much you’re making each month and each year. These figures can help you map out your financial goals and make a budget that lasts

You may only have one source of income to list in this section. However, if you live in a household where you and your partner both work, or if you have side gigs or rental property income, this can all be included in your summary.

You’ll see a simple example of an income summary below, but you may also want to include both pre-tax and post-tax income amounts or other monetary benefits you receive from your job, such as quarterly bonuses.

Debt Repayment Plan Example

You can also include a section on your financial plan for debt repayment. This can help you set goal payoff dates for each of your debts and plan how much you’ll want to pay each month to reach your goal. You’ll see an example of a debt repayment plan below, but you can create a similar table to track other short- and long-term goals as well.

Planning today helps set up your future 

Building out a financial plan is something that can seriously help your financial future. Not only does it include components of your budget like your cash flow, but it also considers things like your short-term and long-term financial goals. This can help you get where you need to go with a firmer financial strategy in mind (and practice). 

Navigating through life while managing your personal finances can be tough. Financial situations change and evolve over time. If you're looking for more tips, you can sign up for Tally's† personal finance newsletter. You'll receive financial pointers each week, delivered straight to your inbox. 

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