When
you’re planning a cross-country road trip, one of the first steps
is determining your route. Without a roadmap — physical or
digital — you have a higher chance of following an inefficient
course or even getting lost. Plus, you might end up missing some of
the sights you wanted to see most.

Your
financial journey is very similar to taking a long road trip in the
sense that it’s best to proceed with a plan. A little foresight can
help you hit your goals while avoiding major missteps.

Here’s
more on how to put together your financial plan.

Check
Your Credit Reports Annually

Start
by making it a point to check your credit reports regularly. Everyone
in the U.S. is entitled to one free credit report every year from
each of the three major reporting bureaus — TransUnion,
Experian and Equifax. Each of those reports will contain slightly
different information, which is why it’s wise to keep tabs on all
of them.

Requesting
one free report every four months on a rotation will help you spot
any errors that may have made their way into your credit history, as
well as track your financial trajectory. The more you know about your
spending habits and history, the more relevant goals you’ll be able
to set for yourself.

Set
Short- and Long-Term Goals

Your
financial plan should contain a mix of short- and long-term financial
goals.

Common
examples include:

• 
  Building your
  emergency fund up to a certain threshold
  
• 
  Saving a down
  payment for a home or vehicle
  
• 
  Opening a
  401(k)/IRA or contribute more to your existing retirement account
  
• 
  Starting a
  business
  
• 
  Saving $100, $500,
  $1,000, $10,000, etc.
  
• 
  Getting out of
  debt
  
  

Short-term
goals, like saving for your next vacation or padding your emergency
fund, helps you avoid taking on debt in the near future
— which in turn helps you free up more money for long-term goals,
like saving for retirement or buying your dream home.

The
goals you set should motivate you rather than intimidate you. Think
about small, money-related actions you can take right now or tomorrow
to get you closer to your bigger aims in life. Be sure to write those
goals down, rather than just thinking them.

Deal
with Debts Strategically

Debts
tend to be a drag on your finances and
your mental health. So, it’s
time to deal with them systematically.

Prioritize
your efforts if you tackle debt repayment on your own. Pay the
minimum amount due on every balance. Choose an order in which to
tackle your balances: lowest balance to highest balance (snowball) or
highest interest rate to lowest interest rate (avalanche). Once
you’ve done so, hit that debt with every available dollar you have
left after your other expenses are covered to pay it in full. Repeat
the process with each succeeding obligation until they’re all paid
off.

If
your debts are significant enough to warrant help, look into various
solutions like:

• 
  A debt
  consolidation loan through a bank, credit union or online lender
  
• 
  A debt management
  program through a credit counseling agency
  
• 
  A debt settlement
  program through a firm like Freedom
  Debt Relief
  
• 
  Bankruptcy as an
  absolute last resort for crushing debt
  

The
sooner you decide how to tackle your debts, the less you’ll pay in
total interest and the quicker you’ll be able to focus on your
positive financial goals.

Create
a Realistic Spending Plan

In
some regards, budgets are like fad diets; it’s easy to start out
with the best intentions, only to trail off soon after or realize it
just isn’t working for you. That’s why it’s often more helpful
to put
together a spending plan
— or a straightforward spreadsheet tracking all sources of
income vs. all sources of expense.

Nowadays,
you can even take advantage of an expense-tracking app to log and
categorize your purchases. This makes it even easier to analyze your
habits and make positive changes.

A
solid financial plan will contain a spending plan, goals for the
short and long term, strategies for addressing debts and up-to-date
credit information.