One of the most important things you can do for your finances is to make a plan. Understanding what you want to accomplish with your money — and how you will get the money to accomplish your goals — is vital if you want to succeed. There are numerous quotes about the virtues of creating a plan, but in the end it’s about practicality. If you have no organized plan for your money, it doesn’t really matter what you want. Chances are that you won’t get it.

What’s Important to You?

Before you start planning, you need to figure out what’s important to you. Whether it is a retirement goal, a vacation or the freedom to live the lifestyle you want, you need to decide on some priorities. Think about what you enjoy doing, and what you’d like to do more of. Would you like to spend more time with your family? Is it important to be able to give to charity? Do you just want to be able to hit the links every once in a while? Once you know what is important to you, it is possible to begin to create a money plan that allows you to start achieving your goals.

Where Do You Want to Be?

Once you know what is important to you, it’s time to plan where you want to go with your money. Figure out what you want to do. If you enjoy travel, and like to help people, you can look into service travel experiences. If you want to be able to retire by age 50, decide what sort of monthly income you need to develop (or how big a nest egg you need). If you want to work less and have more free time, you need to develop some sort of passive income, or you need to be content with less. Develop your goals, and then figure out what benchmarks you will pass along the way.

Where Are You Now?

Once you have an idea of what’s important to you, and where you want your money to take you, it’s time to honestly evaluate where you are now. Take a look at your financial situation, and take a look at what you are doing with your life. Are your finances in such a state that you will need to clean them up before you proceed with striving for your goals? What are you doing with your time? Does what you are doing currently with your time and money reflect your priorities and values? If not, you need to make some changes. Create a plan that allows you to begin changing the habits you have with money and with your life so that what you do is in sync with what’s important to you.

No plan for your money is going to be effective unless it is rooted in what you think is important. If you are not passionate about getting out of debt and developing income diversity so that you can travel, or eat out more, or have more time to volunteer, or eventually retire and enjoy a hobby, then you won’t be effective. And if you don’t have a money plan for reaching your lofty goals, then you likely face a lifetime of frustration as you continue to waste your money on unimportant things that do little to help you achieve financial success.