What Is a Financial Plan? A financial plan is a document that details a person’s current financial circumstances and their short- and long-term monetary goals. It includes strategies to achieve those goals. A financial plan can help you to establish and plan for fundamental needs, such as managing life's risks (e.g., those involving health or disability), income and spending, and debt reduction. It can provide financial guidance so that you're prepared to meet your obligations and objectives. It can also help you track your progress throughout the years toward financial well-being. Financial planning involves a thorough evaluation of one’s money situation (income, spending, debt, and saving) and expectations for the future. It can be created independently or with the help of a certified financial planner. KEY TAKEAWAYS A financial plan documents an individual’s short- and long-term financial goals and includes a strategy to achieve them. The plan should be comprehensive and highly customized. It should reflect an individual’s personal and family financial needs, investment risk tolerance, and plan for saving and investing. Planning in finance starts with a calculation of one’s current net worth and cash flow. A solid financial plan provides guidance over time and serves as a way to track progress toward your goals.