In my work with financial planning clients, there are certain themes that occur over and over again. I’ve come to think of these themes as my wish list of top financial planning recommendations that everyone should address.

Following these recommendations will enable you to live the life you envision.

  • Invest in yourself. You are your largest asset, particularly early in your career. It is critical to proactively and strategically manage your human capital so that it allows you to build the financial capital to achieve your dreams. Working with a career or life coach can help, as can seeking continuous education to stay on the cutting edge of your industry. Finally, negotiate skillfully to earn what you are worth.
  • Take stock and clarify your goals. As the saying goes, “if you don’t know where you are going, any road will get you there”. Take a step back and think about your big picture goals and dreams. Then think about the steps you’ll need to take to get you there. Prioritize and focus on the most important ones first.
  • Manage your cash flow. Cash flow is king. If you don’t know where your money is going and can’t live within your means, then it will be hard to save for and achieve your goals. Develop a system to be more intentional about where your money goes.
  • Save for a rainy day. Life is uncertain. Prepare for the unexpected by building and maintaining an emergency reserve in a high-yielding savings account. The common rule of thumb is to have 3-6 months’ of living expenses in this reserve.
  • Pay yourself first. Nobody is going to pay for your retirement except you. The earlier you begin saving, the better. Take advantage of tax-deferred retirement plans, such as a 401k or IRA. Contribute at least as much as any corporate match. Most people need to be saving 10-15% of their income to be on track for retirement. Set it up so the saving is automatic.
  • Invest wisely and ignore the noise. The media is good at creating hysteria and a desire to do something. Most people can’t beat the market or time the market successfully over time. Research shows the best strategy is to invest for the long-term and rebalance periodically back to your targets. It’s better to focus on the things you can control, such as fees and taxes, which you can do by using low-cost index funds and exchange-traded funds (ETFs).
  • Manage risk through insurance. Don’t expose yourself to financial calamity by being underinsured. Insurance is an efficient way to transfer the risk of low-probability, but high-severity events to a third party. The most cost-effective way to accomplish this is through high deductibles and high limits of liability.
  • Protect yourself and your families with an estate plan. Make sure your family is protected and your wishes carried out if something happens to you. This is accomplished through estate planning with documents such as a will, power of attorney and living trust. Everyone needs a set of documents if they don’t want the courts to decide what happens to their possessions and minor children.
  • Make a plan and review regularly. Most of us have limited resources, so in order to achieve our goals, it is important to create a plan and review it regularly. You can either do it yourself or work with a financial planner. Research shows that people who work with a financial planner tend to be better prepared for retirement.
  • Be flexible. We don’t know what the future holds and much is out of our control. It is important to be flexible and willing to adjust your goals and expectations as the situation requires. Develop back-up plans in case your first choice doesn’t work out.

Living a fulfilling life entails work and planning. Following the steps outlined in this article will help you build a strong foundation for getting you where you want to go.