Whether it’s the beginning of a new year or another milestone point in your life, life planning is a crucial part of reaching your goals. Think of it as planning to succeed. It’s pretty tough to achieve your goals without thinking through what those goals are first.

If you expect every detail to go according to plan, you will be disappointed. But that doesn’t mean it’s a good idea to skip the process of creating a life plan. It can help you focus to create success in your career, your relationships, your finances, and much more.

What is a life plan?

A life plan is just what it sounds like: expectations for steps and outcomes you’ll find throughout your life. Most of us have a plan of sorts, whether we articulate it or not.

You can increase your odds of accomplishing your goals and dreams by seriously planning for them now. After all, the big things in your finances, family, or career won’t happen overnight. They require time and effort and mapping out your steps.

A financial life plan, career life plan, or any other type of life plan can help get you to where you truly want to be. It’s no guarantee of perfection—but it gives you a target to aim for.

Here are some reasons to make a plan and how it could impact you.

Not having a plan can lead to negative consequences

Instead of walking you through the benefits of creating a plan, let’s look at the negative consequences of not doing so. You might miss out on a lot of great things by failing to plan.

You may drift through life without a clear purpose

This may sound obvious, but when you operate without a plan, you might not feel your purpose. Not having a clear “why” can make you feel aimless.

Your life should be about more than just getting through the days, weeks, months, and years. So you need to have a deeper purpose that drives you forward.

Finding your purpose is essential

Life planning is important for identifying your purposes in various areas. You should make plans for your finances, your most important relationships, your career, and more.

It’s perfectly normal for parts of your purpose and plans to shift over time. But you don’t want to live without any plans, day after day. Making a life plan gives you something to work toward and a reason to get up each morning.

It’s harder to make decisions

Here’s another big problem with living without a plan: making decisions is harder.

Think about it. If you don’t have a plan for your money, it can become easier to overspend. Alternately, you might not know whether you have enough in the budget for a purchase, and then you’ll agonize over it.

This is why a budget is key for your finances—it’s a plan for how you’ll spend, save, and invest. The same is true for other parts of your life. When you create future goals for each aspect of your life, you streamline every decision from that point on.

If you don’t have a set path for the most important things, you might find it impossible to make decisions.

It can lead to future regrets

Finally, a super-important reason for making a life plan is to avoid future regrets. A strong motivator for planning is to ensure you focus on all the right things, helping eliminate regret.

Author Daniel Pink points out in the book The Power of Regret that regrets can actually teach us valuable lessons. But when you can avoid them by making the best decisions for yourself today, wouldn’t you rather do that?

There is an old proverb that says, “The best time to plant a tree was 20 years ago. The second-best time is now.” This can remind you to focus on what you can do today (and in your plans for the future) to create a better life.

If you don’t make a plan (planting the tree), you could look back years into the future with regret. The choices you make today, such as avoiding investing in friendships, holding onto debt for too long, or not trying for that promotion, could haunt you later.

When you start planning, you can help stop those future regrets from forming.

Life planning tips for your finances

One of the most foundational aspects of life success is your finances. So it would be silly to skip making a plan for your money.

Consider your debts

If you have debt like student loan debt or consumer debt, figure out how you’re going to pay it back. You can talk to a debt counselor or also use tons of free resources like finance books and podcasts to help you craft a plan.

Make a debt payment plan to help get you on track to improve your future. Debt can feel like one of the worst financial decisions, but you can recover.

Create a budget you can live with

While not everyone loves a to-the-penny budget, anyone can benefit from basic budgeting.

Following a budget requires knowing your monthly income and deciding how you’ll spend and save. So you can go very simple with the 80/20 rule (80% needs and wants, 20% savings). Or you might check out one of these best budget categories and methods.

A budget is one of the most essential parts of making a life plan. Your money determines so much of your life that you can’t afford to let it slip through your fingers.

Don’t ignore your financial future

Sometimes, if you’re living paycheck to paycheck or struggling to make ends meet, the future seems so far away. But a key life planning step is to think of your financial future.

No matter what stage of life and career you’re in, you need to think about what you’ll do years into the future. So consider your big spending needs that could come up: education, kids’ education, buying a home, travel, and more.

And of course, you should have an eye on your retirement. Investing a portion of your income every month, even if it’s small at first, can go a long way toward building a solid future.

Use life planning to map out your career

Another of the major parts of life that many of us need to focus on is a career. Unless you have a hefty trust fund and don’t care to work, this applies. Make a career plan and think carefully when choosing a career (or changing careers).

Think about your passions and talents

Career counselors, of course, help people to hone in on their skills as well as their passions. If you’re strongly interested in a certain field like law, construction, or hospitality, you name it, you can pursue it.

Thinking about what makes you happy and fulfilled can be a way to create a life plan including a great career. Even if money is a bigger deciding factor than passion, you can still aim to find a job that makes you excited to go to work.

And going hand in hand with your passions are your talents. Think of what you naturally gravitate towards, and it might be something you’re already good at. Your plan can include seeking a career that matches both your talents and your passions.

Create a life plan for a financially rewarding career

While you should aim for a career that fills you with purpose and joy, there’s nothing wrong with looking for a great salary. Making a plan that works for you includes working toward a career that pays you well for your skills.

Be sure to follow good planning tips when you do your career goals (whether you’re 18, 38, or 58)! Research the average starting salary, where you can find jobs in that field, and whether you’ll need a degree or not.

Consider education

Plenty of careers pay well without a degree, but others require extensive education. If you can’t afford education and want to avoid student loans, you may need to make a different plan. That could include working a job you don’t love for a while to finance your education.

Think about salary

Whatever career you’re looking for, incorporate knowledge of salary into your plans. Do you want to make $10K a month?

Or do you have a different figure in mind? Think about the pay and also if it’ll work with where you live and your budget.

Consider how you can grow in your career

If you’re changing to a different field or staying in the job you have, you may want to consider growth potential. Is there room in your field or at your current employer for moving up in the ranks?

Maybe you’re satisfied with your career and salary. But I’d bet you’d still be happy to increase your income, as we all have extra dreams that cost money!

Understand all the benefits of career growth

Career growth isn’t only about money, either. You might have a specific goal of reaching a wider audience, promoting a product that helps the planet, or serving your community through your job.

Chances are, most of us like to grow in our professional skills. We want to become more and more valuable to our organizations. We want to change the world, whether as the first female CEO in our field or in a more humble capacity.

Try to include growth in your job and career in your plans. It’s important to never stop learning, even when you’re an expert in your field.

Life planning for better relationships

Okay, so relationships might sound like the kind of thing you can’t really plan. But great relationships are some of the best things in life, and they require effort.

People are meant to exist alongside one another. Tons of research indicates that we are happier when we have strong social connections. So don’t leave out relationships in your planning.

Recognize the importance of relationships

Social connectedness (but not social media) is an absolutely essential part of our humanity and our lives. Even if you’re an introvert, you still need to interact with other people on a regular basis to be fulfilled.

Having stronger relationships results in better mental health. A great reason to prioritize your friendships and other relationships, right?

Building quality relationships is a huge factor in determining your health and happiness. It can be tough to put in the required time, but it’s clearly worth it.

Make relationships a priority

This may seem obvious, but if you don’t make a plan that values your relationships, you could end up growing apart. Planning should include making relationships a top priority (especially knowing how important they are for your happiness).

Take a moment to think about whether you’ve been giving relationships the time and effort they deserve. This could take some time, as you may have a partner/spouse, parents, in-laws, children, and friends to consider.

And you don’t always need to spend money to get closer to people. For example, you could try these 40 fun things to do for free with friends!

Schedule at least one relationship-building activity per week

Between work and doctor’s appointments and exercising and playing with your kids, it can seem impossible to make time for friends. Or a date night with your spouse. Or a Zoom call with an elderly parent across the country.

That’s why making a plan that includes time for others is so important. So figure out how you can carve out some time to spend cultivating friendships or family relationships.

Perhaps you could begin by choosing one half-hour period each week to devote to a relationship. Maybe it’s an old friendship you’ve neglected, or a grandparent you haven’t called.

Don’t try to suddenly make 17 extra dates with new friends. Just start small with a couple of people you’d like to be closer to, and make them a priority. You might fit in a coffee date with a friend this week, and take it from there!

Follow these steps for effective planning

We’ve already touched on many of these, but here are a few steps for you to follow in your life planning.

1. Picture a life of financial security

When you make your financial plan, you can focus on how financially secure you’ll feel. Also, think about all the ways your money management will make your life better.

Here are some good ideas of what you might envision for your finances:

• Being able to pay all your bills on time
• Saving 20% or more for retirement
• Paying off your mortgage early
• Taking a dream vacation (debt-free)
• Not feeling guilty about small purchases
• Being able to buy nutritious foods without harming your budget
• Supporting a nonprofit generously

2. Imagine your career path

You can make vision boards or write down your dream career path as well. Create a life plan that includes a beautiful future career.

Maybe your ideal career includes a certain income level. Perhaps you’re more focused on personal fulfillment. Maybe you dream big and go for the whole package!

Pick any of these work visions that apply, and add your own:

• Great work/life balance
• Remote work possibility
• Flexible hours
• Location of your job
• A boss you respect
• Being a respected boss
• Fantastic benefits like insurance
• Creating job security for others

3. Envision your ideal relationships

In these exercises on planning, you can also apply visualization to your relationships. Maybe you’re single and dreaming of a partner. Or you moved far from your best friends and need to find close friendships where you live.

Be brave enough to envision how you want your relationships to be. Consider these potential relationship growth goals:

• Kids who love spending time with their mom
• Being a stay-at-home mom
• A partner who supports your career aspirations
• Friends you take yearly trips with
• Friends you see on a weekly basis
• A close bond with an elderly parent or grandparent
• A friend who can see your messy house
• People who would drop anything to help you in an emergency

4. Reflect on how close you are to your goals

As with most planning suggestions, once you’ve nailed down your vision, you might need to reflect a bit. This just means taking a close look at how well you’re doing at meeting all your aspirations.

Look back on your successes

A suggestion for effective reflection: start by reflecting on successes. Think back on your career, your finances, your relationships, and more.

What are some of your biggest successes? Remember those moments that make you proud. By thinking of the positive things, you’ll be feeling good when you start looking at where you need to improve.

Recalling your successes can help build your confidence. You’ll know that you’re capable of doing hard things, and gain strength for the next challenges.

Consider how your life now differs from what you envision

Once you’ve spent time basking in the glory of your past successes, you can look at how you want to grow. For example, what parts of your life aren’t quite where you want them to be?

Not having everything perfectly lined up yet isn’t a failure. It’s just part of the process. You can create a self-growth plan and figure out how to make life even better than it is now.

Most people aren’t 100% satisfied with 100% of their lives. We all need goals to pursue. So don’t feel bad about it, but be honest in comparing how your envisioned life differs from your actual life.

Seeing how your current life doesn’t measure up can help you to set your priorities. Wherever you are discontented, you know that’s an area to seek improvement or learn new skills.

Use life planning to set goals

Of course, you can’t really talk about planning without mentioning goals. Setting goals is an integral part of making a plan that works.

Consider long-term and short-term goals

When you create a life plan, you want to consider goals with different timelines. By looking at short-term, long-term, and medium-term goals, you can make them more manageable.

Use the tool of setting short-term goals as well as mid-term goals (5 to 10-year timeline) and long-term goals. This spreads out your efforts and gives you milestones to look forward to.

Mini goals

Even mini goals are fun to work with. These can often be completed in a day or a few hours. So that means you can set a mini goal and have it checked off your list almost immediately!

Examples of mini goals:

• Work out for 30 minutes today
• Call my dad this weekend
• Stay off social media for one day
• Save $10 this weekend

Shorter-term goals help your motivation by giving you a jolt of adrenaline from the accomplishment. Those help fuel the effort required to reach long-term goals, which take years to reach.

Examples of long-term goals:

• Save $1 million for retirement
• Work out three times a week consistently
• Build a six-figure business
• Pay off my mortgage

Use a variety of goal timelines to help sustain your motivation.

Try for S.M.A.R.T. goals

One commonly accepted method of goal-setting is to use S.M.A.R.T. goals. These are goals that are:

• Specific
• Measurable
• Achievable
• Realistic
• Time-bound

For example, a SMART goal might be, “In five years, I will have saved a 20% down payment for a $150,000 home.”

Whether you’re working on planning for your finances, your relationships, your career, or other factors, try to make your goals fit those criteria.

Prioritize which goals are most essential

Along with creating effective S.M.A.R.T. goals, you need to stick to your priorities. You have to pick and choose what aspects of your life need the most attention.

Figure out what matters most to you. This requires thinking through your values, hopes, and current situation.

When you’re making a life plan, you have to return to your purpose. Setting goals that don’t serve your highest priorities is a waste of your precious time.

When you clearly define your priorities, you simplify all other decisions. Be sure that your goals align with your priorities, and those also align with your total life plan.

Life planning can help you get to where you want to be!

Your life plan can be an essential tool that helps you get where you want to be. It helps you become the person you want to become. Don’t just drift through life without a decided direction.

By making a plan that aligns with your dearest priorities, you can put your focus where it belongs. You only have one life, so be sure to make the most of it.