Create a Five Year Financial Plan [Download Free Template]


Do you ever feel like you’re in financial darkness?  In other words, do you sometimes feel a bit lost when it comes to knowing what you’re going to accomplish with your personal finances over the next few years?

Perhaps you need a guide to get on the right path.  Without a plan, or some sort of road map, it’s just too easy to get lost along the way.  And without having a plan in front of you it’s quite unlikely you’ll be able to stay on track.

I get excited when the subject of personal finance goals hits the table for discussion.  I love to think about the future when certain goals will be accomplished and our family will be a few steps closer to financial freedom.  That’s why out of excitement and just the need to have some personal accountability, I created my simple 5 year financial plan.  Yes, it’s simple and you can do it too!

I want to share more about my 5 year finanical plan with you because I think it can make a big difference in helping you make the next 5 years the most important in charting your course to financial freedom.

What is a 5 Year Financial Plan?

A 5 year financial plan captures all of the financial goals you will accomplish within the next 5 years.  For example, if you desire to become debt free, your plan will capture every payment required to pay off your debt.  If you’re trying to save for emergencies, it will capture every payment to your emergency fund.

Each goal gets assigned a column in a spreadsheet with the payments listed directly underneath.  As soon as one goal is accomplished, you roll your payments over to the next goal.  It’s very much like a debt snow ball.

The most important goals, or the goals you plan to achieve first, are placed in the columns furthest to the left.

How to Determine Your 5 Year Financial Goals

If you’re not sure where to start, one of the best ways to determine your 5 year financial goals is to look at either Dave Ramsey’s Baby Steps or the Crown Money Map.  Identify the first goal you have not yet achieved using either of these two approaches and start there.

For example, if you haven’t saved $1000 in emergency savings, this will be your first goal in the plan (first column of payments) and so on.

How to Use the 5 Year Financial Plan

Once you have your goals identified and built into the plan you’ll see a true picture of what you can accomplish in 5 years.  For me, this was a lot of weight off my shoulders because it removed uncertainty around our family goals and also brought visibility to the next 5 years.

As long as we execute the payments, to ourselves (for savings) or to pay off debt, and other circumstances don’t impact our progress, we know what we can accomplish in those 5 years.

Of course, there will probably be some hiccups along the way.  If that’s the case, I’ll make a copy of my baseline plan and update or adjust it based on the hiccup.  Note: I always like to keep a copy of the original plan to see how my results compare.

For example, we might have to use some money from emergency savings for something.  This would take us off track in trying to pay off our remaining car loan.  That’s okay.  We would just delay paying of the car loan to build back up emergency savings and reflect that in our new plan.

Benefits of the 5 Year Financial Plan

There are probably more, but I think these are two key benefits:

1.  Since you will have a visual report of where you’ll be in 5 years.  Having the ability to look at every payment that will be allocated each month to your goals can be a tremendous motivator.

2.  It’s easy to look back and say “where did the time go.”  Often we waste the opportunity to accomplish our goals when they aren’t written.  The financial plan is your 5 year roadmap.  It can be started today and you can avoid wishing you had allocated your money differently 5 years down the road.

How to Create a 5 Year Financial Plan

There really is nothing to it!  I’ve created a simple template in Excel you can use for your plan.  It includes every month for the next 5 years starting in 2010.  I think this is a great way to kick off your New Year, don’t you?

Click here to download my 5 year financial planning template

The plan includes sample goals based on a few of the Crown Money Map goals, but feel free to download it and make it reflect your personal goals.  You may even come up with some better ideas or additional features.  If so, let me know so that I can share with others!

Note:  I’m providing this template completely free because it’s been such a big help to me.  Let me know in the comments if you like it or have ideas for improvement.

About Jason Price

Jason Price is a family man saved by grace, passionate about faithful financial stewardship (1 Cor 4:2 NIV), soccer and the Pacific sun.

  • Leon Batchelor

    At age 33 it’s time I started planning to secure the future for my family.

    • Jason

      Leon, that’s a great age to set your finances in order and get a good plan started. I hope this post helps you.

  • Dr Naseem

    Dear

    Hope you are fine and doing well today i have found your wesit with due respect if possible please send me a sample of 5 year plan for the controling of malaria

    With Best regards;

    Dr Naseem

  • leoleo_hamhoc

    hi guy,

    Thanks alot for your sample and instruction. I’m a university student, and your advice really help ^^
    Best wishes,