Should You Change Your Financial Planning?
- It’s a smart idea to change your financial plan to fit your current situation.
- If money is tight or you're in debt, focus your financial plan on paying off what you owe and building stability
- As you advance in your life, your financial plan’s focus can change to growing wealth through smart investing.
If you're like most people, you probably have a limited amount of money and a lot of goals you want to achieve with it. You need to be smart about how you use every dollar so you can try to grow your net worth and avoid borrowing so much that you need debt relief.
That's where financial planning comes in. Financial planning allows you to create a roadmap for using your money that'll put you on a successful path. It's not just something you do once. You'll need to update and modify your financial plan throughout your life as your circumstances and goals change.
What Is Financial Planning?
Although financial planning is often thought of as a service for the wealthy, it’s even more important to have one if you’re not wealthy. The less you have to work with, the more you’ll want to be mindful with your money so you can make sure it takes you where you want to go. Anyone can have a financial plan.
Financial planning involves looking at your current financial situation and your financial goals for the future, and creating a plan for how to reach those goals. In other words, it involves looking at your starting point and your desired end point, and charting a course from point A to point B.
A financial plan usually includes the following:
A retirement plan, including the details of when you expect to retire and how you plan to cover your living expenses in retirement.
A long-term investment plan, which details how you’ll save for goals like retirement, a child’s college costs, and healthcare costs as you age.
A tax reduction strategy, which includes taking advantage of tax-advantaged accounts like a 401(k) or IRA, 529 college savings account, or health savings account
A risk-management plan for unexpected situations such as a job loss, health crisis, natural disaster, disability, and death.
An estate plan, which includes planning for your funeral expenses as well as determining how your assets will be distributed to future generations after you pass away.
How Do You Create a Financial Plan?
Your financial plan can be simple or complex, depending on your situation and needs. To create a simple financial plan for your household, you’ll need to determine:
Your current financial situation
Your medium-term and long-term financial goals
Your investment strategy
On top of that basic structure, you can add tax planning, risk management, and estate planning as appropriate for your situation.
Determining your current situation for financial planning purposes
To get a clear picture of your financial starting point, you'll need to find the following information:
Assets: List things that you own, like a house, car, and business
Liabilities: List money owed, such as credit card debt, the remaining mortgage on your house, and a car loan
Net worth: Add up the value of your assets and subtract the amount of your liabilities to calculate your net worth.
Income: List sources of income and how much you get from each on a monthly or annual basis.
Expenses: List your regular monthly or annual expenses.
Cash flow: Subtract your expenses from your income to get your cash flow.
Knowing these details gives you a good jumping off point as you create or change your financial plan.
Medium-term financial planning goals
When creating or changing your financial plan, it’s a good idea to look at both long-term goals and medium-term goals. To address more immediate goals, ask yourself:
Do I have a rainy-day fund to cover unexpected expenses such as a job loss or health crisis?
Am I setting aside money for a big purchase like house, car, or college?
Am I saving the money necessary for a planned vacation, or extras like holiday spending?
Goals: Long-term plans
Finally, you need to think about where you want to end up in the distant future. For example, even if you’re a long way off from retirement, now is the best time to start thinking about the needs you’ll have in your later years. Starting early gives you the chance to take advantage of the power of compound interest in your investments. Here are some questions to ask yourself:
When do I want to retire?
How much money will I need monthly in retirement?
How will I cover my health costs?
How will I provide for my final expenses, bequests, and debts when I pass away?
Getting there: Strategy
Once you know what your goals are, the next step is to figure out what financial tools you’ll use to fund your savings goals, such as:
An emergency savings account for short- and medium-term unexpected expenses
A retirement plan, such as an IRA or 401(k)
An HSA for healthcare costs now and in the future
A 529 college savings fund
Life insurance
Even if your financial goals are modest, having a solid plan written down will go a long way to helping you achieve your goals.
Should You Change Your Financial Planning?
Once you have made your financial plan, hopefully, you will be able to follow it for a long time and will begin to grow your net worth and make real progress on accomplishing your financial goals. However, your life doesn't stay frozen in time forever, and your financial plan shouldn't either.
You should change your financial planning regularly to adjust to different things going on in your life. For example:
If you get a promotion or raise, you should update your financial planning to decide what you want to do with the new income
If you add a family member through birth or adoption, you'll want to change your financial plan to accommodate the needs of your growing child
If you are not making progress toward your goals, you should change your financial plan. Tracking your net worth over time can help you to ensure that you are on track and can alert you to the fact you may need a change
Commit to reviewing your financial plan at least once a year, even if no big life changes happen, as you don't want to get stuck in a financial rut and not have the right plan in place that sets you up for success.
Debt relief stats and trends
We looked at a sample of data from Freedom Debt Relief of people seeking a debt relief program during July 2025. The data uncovers various trends and statistics about people seeking debt help.
FICO scores and enrolled debt
Curious about the credit scores of those in debt relief? In July 2025, the average FICO score for people enrolling in a debt settlement program was 594, with an average enrolled debt of $26,235. For different age groups, the FICO scores varied. For instance, those aged 51-65 had an average FICO score of 594 and an enrolled debt of $28,273. The 18-25 age group had an average FICO score of 557 and an enrolled debt of $15,871. No matter your age or debt level, it's reassuring to know you're not alone. Taking the step to seek help can lead you towards a brighter financial future.
Home-secured debt – average debt by selected states
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) (using 2022 data) the average home-secured debt for those with a balance was $212,498. The percentage of families with mortgage debt was 42%.
In July 2025, 25% of the debt relief seekers had a mortgage. The average mortgage debt was $236504, and the average monthly payment was $1882.
Here is a quick look at the top five states by average mortgage balance.
| State | % with a mortgage balance | Average mortgage balance | Average monthly payment | |
|---|---|---|---|---|
| California | 20 | $391,113 | $2,710 | |
| District of Columbia | 17 | $339,911 | $2,330 | |
| Utah | 31 | $316,936 | $2,094 | |
| Nevada | 25 | $306,258 | $2,082 | |
| Massachusetts | 28 | $297,524 | $2,290 |
The statistics are based on all debt relief seekers with a mortgage loan balance over $0.
Housing is an important part of a household's expenses. Remember to consider all your debts when looking for a way to get debt relief.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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Author Information
Written by
Ashley Maready
Ashley is an ex-museum professional turned content writer and editor. When she changed careers, she was finally able to focus on turning her financial situation around. She went from deeply in debt to homeowner in two years. Ashley has a passion for teaching others about better living through better money management.
Reviewed by
Christy Bieber
Christy Bieber has been writing about personal finance and law for 16 years. She has a JD from UCLA School of Law with a focus on business law, and a BA in English, Media & Communications from the University of Rochester, as well as a Certificate of Business Administration.
When should you review and update your financial plan?
You should review and update your financial plan at least once a year, as well as when you experience any type of major life changes. If you get married, adopt or give birth to a child, get divorced, buy new property, or start to move into retirement, you should update your financial plan.
At what income should you get a financial planner?
There are no minimum income limits to get a financial planner. Many planners will work with people who are just getting started financially, so they can help them make the right decisions to set themselves up for success. You do need to be able to afford the cost, though. Ensure the financial planner you are using is fee-only (meaning they are paid a set fee or on a set hourly basis, rather than based on the value of your investments) and make sure the price of their services is affordable for you.
When should I change my financial planner?
You should change your financial planner if you don't believe you are getting good service. If your planner isn't listening to you, isn't helping advance your goals, is charging fees that are too high, or is acting in their own best interests instead of yours, you should make a change.