Whether your goal is to continue your education, buy a home or take that long-dreamed-of trip, a financial plan can be the road map to your next money destination. It can also be a safeguard for life’s unexpected moments, flexible enough to shift as you move through new challenges and chapters.

Here’s how to begin building a financial plan that works for you now, and for whatever comes next.

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1. Calculate your net worth

To build a financial plan for your next goal, start by figuring out where you stand.

“Add up all of your assets, what’s in your savings and investing accounts and the items you have of significant value,” says Tom Drake, a financial analyst and founder of financial education website MapleMoney. “Then subtract your debts. That net worth number can give you a starting point. You can get a snapshot of where you are, so you have a better idea of what needs to happen to get you to where you want to be.”

2. Know your inflows and outflows

Next, get a feel for your income and expenses. You can list out your sources of income and what date you receive them, as well as listing out all of your expenses, explains Cassandra Cummings, an investment advisor representative and founder of the Stocks & Stilettos Society, a community for women investors. This exercise gives you a sense of how money moves through your household.

“Start by focusing on your mailbox items,” Cummings says. “These are those bills that you pay each month. Look at where the money is going, and figure out whether it really needs to be going there.”

After you know where the money comes from and where it goes, you can start identifying areas of improvement and build those into your financial plan.

3. Set financial goals

Next, look to the future and figure out what you want your money to accomplish for you. Drake recommends thinking about your financial goals in terms of lifestyle accomplishments. Rather than just thinking about saving more, think about it in terms of building a college fund for your children, renovating your home to make it more functional for your family, or setting aside enough so you can visit your parents as often as you’d like.

“Your financial goals need to have a purpose behind them in order to effectively motivate you,” Drake says. “Think about why you want to save up for your child’s college, what it would mean to have a house or why you want to retire.”

4. Map out your strategy

Now that you know where you are and have an idea of where you want to be, it’s time to set up your strategy to make it happen.

“Look at what you need to go toward day-to-day living expenses, and then work from there,” Cummings says. “Break down how much you need to put toward debt repayment, and how much you should set aside each month to meet your retirement goals.”

You can use an online calculator to help you estimate your needs, as well as figure out what types of assets you need in your portfolio. If you’re struggling to get a handle on strategy, consider speaking with a financial professional who can review the situation with an outside view and provide you with helpful insight in creating a plan.

Why should you use a financial plan?

One of the best reasons to use a financial plan is to provide you with clarity and an actionable approach to managing your money in a way that will help you now and in the future, Cummings says.

“Your financial plan maps out where you’re going with your money and gives you a plan for getting there,” Cummings says. “You can see it all laid out and visualize your next steps.”

Additionally, your financial plan can help you stick with your strategy when things get tough. Your plan can be a good reminder not to respond to the whims of the stock market, for instance. Plus, when you look at your plan and track your progress, you can see how you’ve improved and gain further motivation as a result.

However, Cummings cautions, it’s important to understand that your financial plan isn’t chiseled in stone.

“It’s really a fluid document that you can tweak as life events occur,” Cummings says. “You don’t throw it out the window, but you can make adjustments as needed. Be flexible and know the plan can change and be comfortable with that.”

Next steps

Ultimately, your financial plan is all about your priorities. When building your plan, Drake recommends thinking about what matters most to you, and what you hope to accomplish in your life, both short- and long-term.

“Many people don’t like to plan,” Cummings says, but “a financial plan is necessary if you want to take control of your finances and put your money where it matters most.”

Once you have an idea of your priorities, you have the framework for creating a solid financial plan, and you’re ready to start working toward your next goal.

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