You have started working in a career field that matches your interests and passions but your journey does not end there. You need to think about the future, other goals you have established for yourself and how you plan to achieve them. One way to begin turning your goals into reality is to start planning financially for your future.

What is Financial Planning?
Financial planning is the process of defining goals, developing a plan to achieve them and putting the plan into action. Financial planning is a process, not an event or a product. It is a process in which you can move through your goal setting to planning and action. The National Endowment For Financial Education has identified six ongoing steps one should understand and follow in the financial planning process.

Step 1: Gather Personal and Financial Information
Begin to put your plan into action by collecting personal and financial information about yourself. What are your interests? What are your values? How much money do you make? Where do you spend your money? What are your spending habits? How much do you save?

Step 2: Establish Clear Financial Goals and Objectives
Every plan need a purpose and your written goals and objectives will help you determine what your purpose is. They will help you determine where you want to be in the future, why you want to be there and how you plan to get there.

Step 3: Process and Analyze Information
After you have collected your information you will need to review and analyze it to determine if anything is missing. If it is, then where do you find the additional information you need to make important decisions?

Step 4: Develop a Comprehensive Financial Plan
This involves determining the amount of your income and expenses and how you handle them. This is discussed in more detail later in the article.

Step 5: Implement the Plan
For your financial plan to be worthwhile, it must be implemented. In other word, put it into action. Take some positive action.

Step 6: Monitor the Plan
Life is full of changes and most things do not stay the same. The same is true with your financial plan. You will need to constantly monitor your plan and make adjustment when and where necessary.

The Benefits of Financial Planning
Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances. By viewing each financial decision as part of a whole, you can consider its short and long-term effects on your life goals. You can also adapt more easily to life changes and feel more secure that your goals are on track.

Best Practices When Approaching Financial Planning

How To Make Financial Planning Work For You
Remember, you are the focus of the financial planning process. You may want to do it yourself or work with a financial planner. No matter what the results, it is your responsibility. To achieve the best results from your financial planning you need to be prepared to avoid some of the common mistakes by:

Setting measurable goals.
Set specific targets of what you want to achieve and when you want to achieve it. For example, instead of saying you want to be "comfortable" when you retire or that you want your children to attend "good" schools, you need to quantify what "comfortable" and "good" mean so that you'll know when you've reached your goals.

Understanding the effect of each financial decision.
Each financial decision you make can affect several other areas of your life. For example, an investment decision may have tax consequences that are harmful to your estate plans. A decision about your child's education may affect when and how you meet your retirement goals. Using credit cards frequently may cause you to run up unnecessary debt. Remember that all of your financial decisions are interrelated.

Re-evaluating your financial condition periodically.
Financial planning is a dynamic process. Your financial goals may change over the years due to changes in your lifestyle or circumstances, such as an inheritance, marriage, birth, house purchase or job change. Revisit and revise your financial plan periodically to reflect changes and stay on track with your short and long-term goals.

Starting to plan as soon as you can.
Don't delay your financial planning. People who save or invest small amounts of money early and often, tend to do better than those who wait until later in life. Similarly, by developing good financial planning habits such as saving, budgeting, investing and regularly reviewing your finances early in life, you will be better prepared to meet life changes and handle emergencies.

Being realistic in your expectations.
Financial planning is a common sense approach to managing your finances to reach your life goals. It cannot change your situation overnight; it is a lifelong process. Remember that events beyond your control such as cost of living increases, inflation or changes in the stock market or interest rates will affect your financial planning results.

Realizing that you are in charge.
Be sure you understand the financial planning process and what you should be doing. Gather all of the relevant information on your financial condition. If you need help seek the assistance of a financial planner. If you choose to use a financial planner, make sure you ask questions about the recommendations offered to you and play a very active role in all decision-making involving your finances and your future.

A Crash Course in Financial Management
The following is an eight-step crash course in financial planning. Use a pencil and paper and your financial information, such as your checkbook, recent bank account statements, credit cards statements, auto loan payments, other loan coupons, your federal tax return from last year, and any other relevant documentation.

As you go through the "course," use conservative figures and time frames. A healthy dose of pessimism is useful here. Should things ultimately turn out much better than you had planned, you will be pleasantly surprised. Once you understand your budget clearly, you can then concentrate on getting it under control and developing a financial plan for your future.

Step 1. List Your Income
Make a list of all sources of income you expect to have and when you expect to receive the income (weekly, monthly, quarterly, etc.). Include your pay, if any, as well as any unused vacation, severance pay, and unemployment compensation. Also list any interest income (interest from a bank savings account, for example), spouse's income, alimony or child support, and other income you expect to receive on a regular basis. Next, compute all of the sources on a monthly basis: If the income is weekly, multiply it by four. If it is quarterly, divide it by three. Be conservative. Estimate the lowest amount you expect to receive from each source of income.

Step 2. List Your Expenses
On a separate list, write down all of your expenses: mortgage; rent; taxes; utilities; food; clothing; insurance (life, health, automobile, homeowners or renters, etc.); car or motorcycle expenses (payments, insurance, registration, gas, maintenance, and repairs); credit card bills; other loans; magazine subscriptions; cable TV; club dues; gifts; job-hunting costs (stationery, printing, drycleaning, etc.); entertainment and hobby expenses; children's spending money; alimony or child support payments; groceries; personal items; and all other expenses. When listing expenses, take time to think of everything-all the way down to medicines and toothpaste.

Next, list the expense for each item and an average monthly cost. In a world where jobs are not promised it is sometime good to even plan around the assumption that there may come a time when you are temporarily unemployed. If the cost is not "fixed" (such as rent or mortgage payments that cannot be avoided), plan on the smallest realistic amount you can get by on.

Step 3. Prioritize Your Expenses
After listing all of your expenses, rate them as high, medium, or low priority. High-priority items are things you and your family cannot do without: food, shelter, clothing. Medium-priority items are important to you, but you can exist without them. Low-priority items should be weeded out of the budget process. Example: Rent or mortgage is an "H"(high priority), while piano lessons for your 10-year-old daughter may be an "M" (medium priority), and cable TV fits into the "L" (low-priority) range.

Step 4. Assign Budget Responsibilities
If you are married, determine who is going to be in charge of staying within the budget for each item on the expense list. Example: You may take responsibility for the rent and clothing, while your spouse may be responsible for the food budget and music lessons. If you are single you have to make sure you focus on staying within any budget parameters you set.

Step 5. Establish a Monthly Budget
Subtract your total monthly expenses from your monthly income. If you have more income than expenses, put the extra money in a savings account for emergencies. You will also want to put some of your money in investments such as mutual funds, stocks, and other assets that will help your money grow into a nest egg for the future. If your monthly expenses are more than your income, look over the low- and medium priority items. Work to reduce some and eliminate others.

Step 6. Identify Additional Sources of Income
If, after all possible cuts have been made, expenses are still greater than income, consider ways to bring in additional money. This may mean a part time or freelance job or even starting your own business on the side. If you are married and your spouse does not currently work, he or she may need to begin working at least part time.

Step 7. Obtain an Up-to-Date Credit Report
It is important to have an up-to-date credit report on you and if you are married your spouse should make sure he/she obtains one as well. Review any debts you may have on your credit report and make sure they are yours. With "identity theft" growing, many individuals are finding unauthorized charges or debts on their reports. If this is the case make sure you report and take care of it immediately. If you have some negative marks on your credit due to bad financial management and not paying your debts develop a plan and find ways to pay those debts off and get them removed from your credit report. Your credit score will affect you getting a loan for a house, car and other high end products.

Step 8. Seek Help
Even after you have cut your expenses to the bone and uncovered additional income possibilities, if you still are unable to make ends meet you may need some help. This is sometimes due to outstanding loan amounts and heavy credit payments. If this is the case you may want to talk to the free Consumer Credit Counseling Service in your area to find ways to work with your creditors to delay payments or extend the time for loan repayment. This will assure your creditors that you do intend to pay them off over time, and it will help prevent you from going into bankruptcy.