The Best Financial Planning Process to Build Wealth

Dreaming of retiring early or making purchase decisions without stressing over budgets? Financial freedom requires a strategic financial planning process. Luckily, you don’t have to be a genius to master the most successful money strategies.

Minimizing the fear of financial scarcity and reaching financial freedom is an attainable goal. With the right approach and dedication, it is possible to create a stable financial foundation for yourself and your family.

This article will provide an overview of factors that will guide your financial decision-making and some key strategies that anyone at any age can employ to start building greater wealth. 

First, we will look at your current financial situation and your specific financial goals. Then, we will discuss broad market indicators and their impact on your financial tactics. Last, we evaluate when and what to do with your money over time as your wealth grows and markets shift. There are a variety of paths to success and financial stability. We hope this article provided valuable insights and tips you can implement today as part of your strategic financial planning process moving forward.

Personal Financial Situation

Before you take any steps to improve your finances, it is important to understand where you’re starting from. Then, you will be ready to make informed decisions about your financial planning process and how best to set specific financial goals.

There are several questions you need to ask yourself. What’s your income, credit score, cash on hand, debts, and expenses?

What are your short-term and long-term financial goals? How comfortable do you feel with your financial knowledge?

 Continue to ask clarifying questions until you thoroughly understand your financial circumstances. Answering these questions will help you create a realistic budget that suits your financial needs. 

It will also help you prioritize aspects of your finances that need attention and determine realistic short and long-term goals. This section will discuss these items and how they impact your broader financial picture.


Skilling up, job hunting, getting a promotion, taking a second job, or starting a side hustle. These are all well-known ways to increase your income, but each demands time, energy, and sometimes money, like the cost of a class or the tools required to start a business.

Rather than take drastic measures to bring in more money, it’s more prudent to know the value of your skills and the competitive wage for positions like yours with other companies. Unless you notice a discrepancy of 25% or more, it’s best to accept your income as a constant figure and prioritize maximizing the next three elements of the financial planning process.

Credit Score

Your credit score is a three-digit number ranging from 540 poor, 704 average to 800+ excellent. Credit scores are calculated from data in credit reports that lenders use to gauge how much of a risk an individual is as a borrower. Understanding and making progress to maintain a healthy score will play a significant role in how you prioritize other aspects of your financial planning process. 

It helps lenders decide whether to approve loan requests and determine the interest rate on loans, credit cards, or other financial products. A good credit score can open up many opportunities, including being approved for a mortgage and getting better loan terms with favorable interest rates.

Monitoring your credit score has become easier than ever before. Almost every credit card or bank provides you with your FICO credit score for free each month, either online or on your paper statement. Once you know your credit score, you will know if it’s healthy or if you need to take steps to improve it.

Cash On Hand

How much money is in the bank? Do you have a checking account and a separate savings account? What about any investment accounts with stocks? Cash on hand is all the low-risk, liquid money you can access immediately with little to no penalty.

Typically, the goal is to have three forms of cash on hand. A checking account to cover monthly expenses and credit cards, a savings account for large purchases like a new car or mortgage downpayment, and an investment account with stocks or other investment products that can be sold quickly.

A tried and true rule of thumb is accumulating and maintaining at least six months of living expenses in your checking account before building savings and investment portfolios. This means paying close attention to your spending habits and financial obligations like debt. 


The next step is evaluating both debts and expenses. Debts include credit card balances, student loans, auto loans, mortgages, etc. Determine your outstanding balances and the interest rate associated with each.

Traditional wisdom prioritizes paying off debts with the highest interest rates first, as they will be the most expensive debt in the long run. Depending on how aggressively you wish to reduce your debts, you should also consider making extra payments to reduce the principal as much as possible. 

Another great way to reduce your payments is by researching options for refinancing and consolidating debt payments at a lower interest rate. The key is to ensure that your consolidated monthly payment is the same or less than what you paid each lender individually. You will also want to look at the amortization schedule of each loan to make sure the one larger loan doesn’t end up costing you more money in the end. 


Expenses refer to any non-debt-related expenses like rent, utilities, food, vacations, and entertainment. Identifying areas where you can cut back on spending and creating a budget that works for your financial goals is important.

It also helps you prioritize your daily spending and identify areas where you can save more money. Several free apps are available that help you track expenses and monitor budgets in real-time, making it easier to understand exactly where your money is going.

Taking the time to assess your financial situation will allow you to make more informed decisions regarding investing and planning for retirement. Plan to revisit your spending and budgets more frequently in the beginning. As you gain confidence and familiarity with your finances, you may not have to look at them as frequently. 


Structure Your Money and Allocate Accordingly

Checking, Emergency Fund, Nest Egg Savings, Investments funds. Each one of these accounts serves a purpose and will help you gain momentum to build diversified wealth quickly.

When establishing your bank accounts, make sure to shop around for any special offers exclusive to new customers. This is a great way to earn a few extra hundred dollars if the bank meets your other service requirements.

As mentioned previously, keeping six months of living expenses in an emergency fund is a savvy money habit everyone should practice. This money is vital if you need to cover any unexpected changes in income.

It would be great if the account in which you keep your emergency fund could accrue some interest, but typical savings interest rates are pretty low. However, it’s worth looking around, especially in 2024, when interest rates are the highest in decades.

It’s possible to earn over 4% APY on your money with a CIT Savings builder account right now. That’s without any restrictions on getting to that money if needed. This is a particularly great account to have your nest egg funds.

Investments like CDs, Money Market Accounts, EFTs, Mutual Funds, and Stocks usually offer the greatest return on your money, but each product has advantages and disadvantages. At a minimum, anyone aged 18 to 35 should have a Roth IRA. Beyond that, it may be best to wait until you have more discretionary funds before getting too heavily invested. 

Always Invest in Yourself

After you’ve found the banks and investment products that suit you, it is time to make investing in yourself a key part of your financial planning process. Once a month or every pay period set up an automatic deposit from your checking to your savings and investment accounts. Treat these automatic withdrawals like any other monthly bills.

There will always be temptation and the lure of fun times. Preparing yourself mentally to confront the invitation for a spontaneous dinner with friends or desire to buy ‘that’ thing will make all the difference between achieving your financial goals or continuing to live in financial duress. 

Keep a list of free or low-cost ways to occupy your mind and keep yourself focused when your budget is tight. Let friends and family know your goals so they can help support your efforts to invest in yourself rather than adding to the temptation.

Once you have effectively funded your emergency savings threshold, you can focus on building your nest egg fund for a large purchase like a downpayment on a home, new car, or well-earned vacation. A third option at this point would be to allocate more funds toward additional investment accounts.

Putting Your Financial Planning Process to Work

Designing your strategic financial planning process for financial abundance is like creating a map. Once you’re aware and familiar with your financial landscape, you can start prioritizing and developing a plan to reach your short and long-term goals.

Initially, you may focus on paying down debt and improving your credit score. Next, it might be reaching your emergency fund threshold so you can start working on maximizing your investments and long-term savings fund. 

Wherever you are on the financial map, always keep your bearings and have a clear idea of your destination. Building wealth is possible with a strategic financial planning process and the discipline to see the plan through to completion.

Strategic Financial Planning Process for Building Wealth
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Marly is a lifestyle writer and creator of, a site dedicated to helping readers improve their health, wealth, mindset, and overall happiness. When she’s not writing, you’ll find her listening to audiobooks while gardening, visiting with family, or traveling.