An illuminating Straits Times article published early this year revealed the results of a poll conducted by the Financial Planning Association of Singapore (FPAS). Some unexpected and uncomfortable finds were disclosed. Only a third of Singaporeans had a comprehensive financial plan. Only 11% felt knowledgeable about financial matters. Most felt that financial planning is too confusing, too complicated. However, the majority of those polled expressed a strong interest in budgeting, investing, and retirement planning.

Financial planning isn’t the most fun chore in the world, but it’s not a scary uphill battle either. Financial planning does require some financial literacy, but not extensively so. If you are relatively vigilant, disciplined, and willing to do research, crafting a personal financial plan and sticking to it isn’t troublesome.

There really is no cons of making a financial plan. All we can think of are the pros. Got goals, dreams, or retirement needs? Of course you do. A financial plan acts as a progress report. How can you tell if you’re on the right track if you don’t have a pathway?

If you need more proof of the benefits of financial planning, check out this Forbes article. It is shown that those with a financial plan “feel more in control of their finances” and live more comfortably than even others making more income.

To help you craft a realistic financial plan, here are eight simple steps:

1.    Ask yourself: What are your future goals?

Hated though these questions are, you need to answer: “Where do you want to be 5, 10, 20 years down the road?” and “What do you really want out of life?” Refinement and realism are key. Don’t answer with something generic like: “I want to be rich” or “I want to travel the world.” Be more specific. Perhaps “In twenty years, I want to own a house, have A amount in savings, B amount in investments, and C amount in my retirement funds.”

You don’t need to be 100% accurate. Give yourself some leeway. But don’t imagine a plush, first-class lifestyle in ten years if it doesn’t match up with your past and current earnings. Selecting sensible goals is especially important if you plan to have a family as many financial decisions shift with the arrival of children.

2.    Know your current worth

You can’t get to your destination without a starting point. Here is the step where you need to pull out all your records and grab a calculator. Compile as much information as you can. Estimate what you can’t and just update the numbers later.

(Protip: keep all your financial documents organized – it will save time and save you headaches in the long run)

For a start, make a list of the following:

  • What you own: starting from your house, your car, your savings, and your investments
  • What you owe: mortgage, car loans, credit card bills, etc
  • What you make: all your income and investment returns
  • What you spend: we will detail this in the next step

3.    Check your current expenses

You need to figure out where your money is going right now. Get a mini notebook and detail every expense and its cost. Or make a Word/Excel doc detailing your spending, from basics like food, shelter, and fuel to discretionary spending like nights out. Personal finance apps detailed here and here are great for keeping track of expenses.

Make this a habit and every month; think about your expenses. No one should live a mean existence and life should be joyous. But are you overindulging and overspending when you could be saving for your future home or your retirement? See if you need to put your priorities in order.

4.    Start saving

Saving and budgeting are crucial and there are many rules of thumb about saving. Some say save 10% of your income. Some say always have an emergency fund worth three months of income. But if you are new to saving your income, it’s best to ease into it. Cut some spending, but don’t murder all your pleasures. Don’t outspend your income. Make sure you are saving as much as you reasonably can.

Related: Here’s Why You Need an Emergency Fund and How to Get Started

5.    Pay off your debts

A self-explanatory step. In fact, if you have a high-interest debt, it is imperative that you manage your finances to pay it off. High-interest debts eat into the returns you make off your investments and swallow whole what you earn in a savings account.

Clearing out your debts will also improve your credit score.

6.    Build your investment portfolio

More than your savings account, it is your investments that will take care of you during your retirement years. Some basic but important rules of investing: Always research – always. Understand the risk and reward rule: the higher the risk, the higher the potential return – and vice versa. Diversify your portfolio: invest in different forms and types – that way if one investment fails, you won’t be deeply hurt.

Related: 6 Investment Options That Every Working Adult Should Know

7.    Get yourself insured

Life is unpredictable. Sometimes terrible accidents happen. It’s hard to contemplate life insurance when your health is good, but even the best plans go awry. We will go deeper in detail about insurance at the end of the month, but contemplating the best health, home, and life insurance is best done sooner rather than later.

8.    Keep track of your plan

If you are really passionate about your end goal, this step is most important. Check on your progress every year. Ask yourself: Am I paying off my debts? Can I save more? Have my investments performed well? Am I doing enough to work towards my goals?

Making and maintaining a financial plan can be a chore, but you will stay in better financial health in the long run.