No. 1 tip for someone who says they don’t have time to make a financial plan

The Takeaway: Getting your financial goals down on paper helps you create a roadmap, and prepare for setbacks. Start simple with a one-page plan that outlines your goals, values and actions.

A survey conducted earlier this year for the financial giant Charles Schwab found that nearly two in three Americans, across generations, have no formal financial plan.

Their excuses ranged from not having enough money to need a plan (mostly boomers, interestingly) to not having enough time to put a plan together (mostly Gen Zers and millennials). Some said a financial plan just seems too complicated.

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The problem with not having a financial plan? 

It’s like trying to go somewhere you’ve never been without a map. You might have a clear picture of the destination — say, a sandy beach on the shores of Florida — but no idea which highway to get on, where to stop for fuel, or what weather or construction delays to expect. 

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You just cross your fingers, follow the road signs, and hope you get there by Friday.

I don’t know anyone who gets in their car these days en route to a new place without firing up their GPS for turn-by-turn instructions. The same should be true when you’re trying to reach a financial goal.

A financial plan is your money GPS. It can make life run a lot more smoothly.

Waiting until you have all the time or money in the world to create one defeats the purpose. Ideally you should be optimizing your cash from the very start, using it as an engine to get what you want out of life, whether that’s more time with your family or freedom from daily financial stress. 

An added benefit of financial planning: in thinking about the way you relate to money, you get the chance to address and work through hangups or anxiety you've probably been carrying for years.

OK, fine, you might be thinking — I’ll bite. But what even is a financial plan?

What is a financial plan?

Most financial plans focus on how to afford retirement, since it’s a tricky task to plan for something so expensive and, at times, unpredictable. But that’s not all. 

Your plan could also map out your path to paying off debt, buying a house, throwing an epic wedding reception, expanding your family, starting a business or traveling. Basically anything that’s important to you and requires money to pull off.

A well-crafted financial plan considers all of your goals, helps you prioritize them, and identifies how you can adjust and direct your cash flow to accomplish them in the timeframe you desire. Above all, it needs to be concrete and measurable.

At first it may require implementing some basic budgeting techniques so that you’re able to live on less than you earn and stash the rest in an emergency fund. Or it could mean exploring your investment options and setting up automatic contributions to a retirement account. The list goes on.

A high-level financial plan should also be designed to protect you against potential setbacks, like a stock market crash, job loss, or a death in your family.

These scenarios are scary to think about, but not preparing for them with savings, insurance or other means of financial protection can magnify the devastation.

Related: As a Financial Planner, Here’s the No. 1 Tip I’d Tell Someone Who Wants to Finally Get Out of Debt

It’s never too late to make a plan for your money, but don’t let that be an excuse to wait. Among the 35% of respondents to Schwab’s survey who said they have a formal financial plan documenting their goals, seven in 10 said they feel more in control of their finances. And nine in 10 respondents are confident they’ll achieve those goals.

How to start a financial plan

To be sure, financial planning isn’t free. The typical cost to hire a fee-only financial planner to draw up a comprehensive financial plan can run from $1,000 to $3,000. If you have significant investment assets, you might consider working with an advisor who takes a cut of your investments instead of a flat fee.

For many people, however, that initial outlay for financial planning pays dividends when they’re able to retire on time or put their kids through college.

If you’re hesitant to meet with a financial professional because of the time or cost commitment, try making a one-page financial plan at home (h/t to CFP Massi De Santis). 

List your values (what matters to you?) and goals (what do you want to achieve and when?), and what you’re doing right now to fulfill them, such as saving 10% of every paycheck or tracking your spending.

Then do a quick inventory of your finances, including looking at how your money is invested and your spending patterns. How can you get your actions to match up with your values and goals? This is the starting point for your financial plan.