When you think about financial planning, do you immediately picture your parents or grandparents meeting with a retirement planner and talking about their investment portfolio or their estate plan? It’s how many people view financial planning, but you don’t have to be wealthy and ready to retire to take control of your money. 

One of the best things you can do is learn how to manage your money well throughout life. If you’re a millennial or Gen Zer, you might not feel ready to create a rigid retirement plan. That’s OK! In fact, it’s better to have a more flexible viewpoint on your finances, because things can change so quickly. But even if you’re not ready to discuss retirement, you can still take some proactive steps to get a handle on your money. 

Be prepared for the variables to change

By the time you’re nearly ready to retire, you’ll probably have a fairly set financial plan with minimal room for change. But what if you’re just starting your first “real” job? Or you’re a few years into your chosen career, and you realize it’s not the right place for you? What should you do then?

It’s not really realistic to think that you can create a set-in-stone financial plan when you’re 20 or even 30. There are just too many variables. Maybe you’ll decide to change careers, or you’ll have to deal with a layoff. Your family could grow or you could move across the country (or the world!). The market could keep experiencing “once in a lifetime” events that cause inflation and instability.

You can’t predict everything, but that doesn’t mean you can’t plan ahead at all. It just means that your plans need to be flexible, so there’s room to react when things change. For example, you could take the money you budget for “saving” every month and split it between your retirement account and an emergency fund. That way, you can plan for the future but still have some easily accessible cash if you need it for an unexpected event, like losing your job.

Look at the near future

The core of financial planning is looking ahead and planning for the future. Traditionally, the focus is on the far future: retirement. But with all the unknown variables, it might not make sense for you to make all your plans based on what you think your life will look like two or three decades in the future. 

Instead, focus on figuring out the right financial decisions for the near future. That doesn’t mean you shouldn’t think about retirement, but it does mean that you should look at retirement in general terms and focus on making specific decisions for the next few years.   

For example, maybe your retirement planning right now is nothing more than contributing enough to your 401(k) to max out your employer’s matching program. All the other specifics of your financial plan may be focused on the next few years: saving for a house, paying off your student loans, starting a family, or achieving whatever goals are important to you

Decide how to allocate your resources

Planning for the near future when you’re young is mostly about figuring out how to use the money you have right now. You have countless options, and it can seem overwhelming trying to decide exactly how you should spend, save, invest, and give your money. But you can simplify those decisions by narrowing things down to two main points: your values and your resources.

First, decide what’s important to you. If you have a partner, make sure to talk about your values together so you can create a shared list of priorities. Then, look at the financial resources you have, and decide how to use them based on your values. Make the decisions that are right for you, even if they don’t follow conventional wisdom. If buying a house isn’t a goal that you have, don’t save for a house! 

Find the best way to navigate uncertainty

By the time you retire, you’ll have saved a certain amount of money and will probably have a pretty decent idea of what your living expenses will look like for the rest of your life. But your financial situation right now isn’t set – it’s fluid and always subject to change.

Right now, the best thing you can do is figure out how you’re going to navigate financial uncertainty. Things are going to happen that will affect your finances, and you can’t always know ahead of time what those things will be. 

Maybe they will be difficult challenges, like job loss or an injury that causes a permanent disability. Or maybe they’ll be great changes, like inheriting some money or landing a big promotion. Whatever happens, the key is to learn how to navigate those new financial waters.

Focus on making the next right decision

As a young person, you’re facing a lot of financial challenges that your parents and grandparents never had to deal with. It’s easy to feel discouraged by the economy, inflation, and the housing market. 

But it’s not hopeless. Being young means you have a lot of freedom – you don’t need to have your entire financial future planned out with no wiggle room. You can decide what to do with your money right now, and you can adapt in a few years if your family, priorities, job, or circumstances change.

It’s easier to make financial decisions when you know exactly what your income and expenses look like. If you don’t have a budget (or you have a spreadsheet that you can’t bring yourself to update), try BudgetingBlocks™! This innovative, hands-on method feels like a game instead of a chore. It gives you simple tools to visualize your money and allocate it in a way that’s best for you and your family right now.