For some, it may be they don’t feel like they have enough finances to plan anything. For others, the task of creating one just may get lost in the busy day-to-day bustle of life. But regardless of circumstances, everyone should have a financial plan. Research shows that having a plan leads to better financial habits, including saving more and accumulating less debt.

What is a financial plan?

In the simplest terms, a financial plan is an outline of your present and future financial goals and strategies to help you achieve them.

Brent Dickerson, a certified financial planner and owner of Over Coffee Financial in Cleveland, Ohio, said a financial plan is like a map for a long-distance road trip. “Even if you stray from your original route, a map will help you to get back on track or find another route,” he said. “Without a map, you can set off in the general direction of your destination and try and find your destination that way, but the odds are a lot less that you will end up where you want to be.”

6 steps to build a financial plan

So, how do you create a financial plan? It’s key to have something down in writing, rather than just a vague idea. For some, a financial plan may not go beyond setting goals and a monthly budget, while for others it will include investments, retirement plans, tax strategies and more. You can adjust your financial plan as your income and assets change and as you move closer to retirement, but everyone can benefit from one, no matter how basic. Here’s what to consider as you create your own.

1. Set financial goals

What do you want your life to look like in five years, 10 years, and beyond? Think about things like buying a home, paying for your children’s college, travel, and the age at which you want to retire. Get as specific as possible, and then prioritize those goals.

Though you may not achieve 100% of your goals, it will help you see which are most important to you. Often, knowing what you’re working toward can help make doing the hard work easier than if you’re working toward some vague idea of your future.

2. Review (or create) your budget

A budget is one of the best ways to see just where your money is going — and keep it from going out the window. A budget allows you to set goals based on your monthly income and expenditures and should also, ideally, include savings goals as well.

Once you’ve created a budget, monitor how well you’re sticking to it. That means tracking your expenditures, no matter how small (keep all your receipts!), as well as keeping up with recurring monthly payments for student loans, automobiles, your rent or mortgage and more. You can do it the old-fashioned way with pencil and paper, or a spreadsheet. There are a variety of free budgeting apps and software that can help, too. Whatever works best for you is fine, as long as you have a reliable way to track and review your budget regularly.

3. Build an emergency fund

Your car breaks down. You lose your job. You need to replace a roof that’s leaking rain right into your bedroom. The list of all the unexpected possibilities that aren’t in your budget goes on and on. There are no guarantees in life, and you should prepare for the unexpected — or you risk digging yourself into a deep financial hole.

Most experts suggest your emergency fund be at least three times your monthly expenditures (refer to your budget). You may need to save even more, however, if you’re married and have children or if you’re self-employed. As for where to keep your emergency savings fund, typically savings accounts or certificates of deposit are a good choice, as they allow you to earn interest but still provide easy access to your money with no or low penalties.

4. Work on paying down high-interest debt

Dean Hedeker, principal of Hedeker Wealth in the Chicago area, says the most important priority in your financial plan should be paying down high-interest debt, like credit cards. “If you think about it, credit cards and high-interest debt are designed to basically strangle you,” he said. “It’s the outsider owning you, rather than you owning the outsider.”

He says lower-interest debt, such as mortgages or student loans, may not need to be a priority. In fact, in some cases, you may be better off investing some of the money rather than paying down extra on very low-interest debt. For example, the rate of return on stock market investments over the long-term may outweigh the cost of a low-interest student loan.

5. Put money aside for the future

No matter how far away your “golden years” may seem, retirement savings should be a part of every financial plan. If your employer offers a retirement benefit, such as a 401(k) plan, this is often the easiest and most effective way to build a nest egg. A 401(k) allows you to invest money into an account that will then grow tax-deferred (traditional 401(k)) or tax-free (Roth 401(k)) until you reach retirement age. Because your contributions are typically deducted regularly from your paychecks, it’s an easy way to set and forget your investments.

If your employer doesn’t offer a retirement plan or if you’ve maxed out contributions to yours, you can also consider an individual retirement account (IRA), which offers many of the same benefits as 401(k)s.

6. Invest to grow your long-term wealth

So, you’ve maxed out your contributions to available retirement plans, established an emergency savings fund and paid off your high-interest debt. Now what? Hedeker says at this point, beyond investing in a house, “the stock market is the place to be,” as you can’t beat the average rate of return over the long run.

He said an easy way to jump into the stock market is to invest in some mutual funds that mirror the S&P 500 and set up automatic contributions each month. Then it’s just like another bill you pay. He said putting even $100 a month in the stock market can help you build up a significant amount of wealth over time.

Where to go if you need help creating a financial plan

Can you create a financial plan yourself? Sure, there’s plenty of information out there to help you if you are willing to put in the time and effort. The more complex your finances become and the more wealth you accumulate, however, the more time and effort it’s going to take. That’s where financial advisors come in.

Dickerson says the question to ask is how much time and effort you want to put into learning the myriad information that goes into a comprehensive financial plan. “If it were a simple task, everyone would do it themselves and few of us [financial planners] would have jobs because there would be no reason to pay for something that was easily done yourself.”

Beyond human advisors, there are also legions of robo-advisors available these days. These online services provide personal financial recommendations using algorithms based on the information you provide. Hedeker says robo-advisors serve a purpose and may be a good option in some cases for people with small accounts. However, he said they don’t offer the human factor that you may need as your finances become more complicated.

The most important thing when it comes to financial plans is that you have you one. It’s not something set in stone, but rather it’s a guiding force to help steer you where you want to go. Whether it’s one you DIY or one you develop with the help of a professional, having a written financial plan is one of the most important steps you can take to ensure your financial success.