How To Create a 5-Year Plan For Financial Success

5-year plan

Five years from today seems far away, doesn’t it? But the truth is, 5 years go by really quickly. Despite the rapid pace, you can completely change your world in that window by having and working on a 5-year financial plan.

In that time, you can go from being broke to having financial stability. You can rise from being saddled with debt to living a debt-free and happier life.

But you know what it takes? A plan. It won’t just happen by itself. It’s going to take a lot of hard work and dedication. Wondering how to make a 5-year plan? Let’s dive in!

Why should you create a 5-year financial plan?

You know the saying when you aim at nothing; you’ll hit it every time? It’s true for every aspect of your life - including your finances. Creating a financial plan for the next 5 years does three things for you. Firstly, it helps you to cast a vision for the changes you hope will take place in your life and gives you a map of how to actually get there.

When writing down your financial plan, if you simply say “Buy a house in the future,” that does not carry the same impact as “Save $50K for the down payment for my new house in 2.5 years.”

Which do you think you’ll likely achieve? Definitely the latter. Even this Harvard Business School study supports the fact that people with specific goals have a higher chance of success.

Secondly, 5 years is not too short that you’re left with no time to make changes (e.g., get a new job, move to a new location), but it’s also not too long that it feels like you have eternity to achieve the goals (e.g., unlike thinking of saving for retirement).

Lastly, it will truly transform your mindset around finances and goals for the better. The truth is, for any meaningful change to take place, the changes have to first take place in your mind. Once your mind is changed, you’ll automatically be able to put a plan into action.

If you’re looking to jumpstart your money mindset, check out our course on how to transform your money mindset. You’ll be well set up for success!

How to create your 5-year financial plan

So now let’s get into the step by step of how to make a 5-year plan.

1. Write down your goals

To get started, set aside some time with yourself to seriously think about concrete, tangible items that you want to implement for yourself over the next five years – not pie in the sky wishes, but things that will truly get you closer to the life you’ve always envisioned for yourself.

List these goals in order of priority – that way; you’ll get a better sense of what will make the biggest impact for you in the coming years.

Stuck on where to start? Here are some prompts that can help.

  • If you have debt, how much is it today and when would you like to pay it off completely by?
  • What living situation do you see for yourself in 5 years? Is homeownership a goal? If yes, describe your dream home and which neighborhoods.
  • How much income are you looking to make five years from now? Will it all be from your job?
  • Any interest in starting a side hustle? How much additional income are you hoping to bring in?

As you go through your list, include a list of categories you would like to address, such as:

If it seems impractical, write it down anyway! Your dreams should be bold and audacious because you really can achieve them! You can also use our completely free worksheets to create your 5-year financial plan. Try out a free 5-year financial plan template or make your own in Google Sheets or Excel.

2. Determine what your goals will cost

Some goals are free. Others will no doubt come with a price tag. If you’re working towards a healthier lifestyle, take note of the cost of a gym or a change in diet.

If you’re looking to start a business, what inputs will you need? Some businesses require no money to get started, while others need careful financial planning. Put an estimated budget next to each item together with the year you hope to achieve each by.

3. Get over your fears

If your goals don’t scare you, then you’re likely dreaming too small. Push past the discomfort and fear that comes with bold goals, and you’ll have won half the battle.

Realize this – no one is immune from fear, but what truly sets apart those who are successful, and the rest is that successful people feel fear and do it anyway.

The only way to really conquer fear is to face it head-on. And the first step to conquering financial fears is to cast a vision for what you see for yourself in the near future. Cast the vision and chase it with all you got!

4. Track your progress as you work towards your 5-year financial plan

You’ve probably heard this saying before, right – what gets measured gets managed. You’ve written down your goals and are working towards them, but if you’re not tracking your progress, you’ll never know how close or how far away you are from achieving them!

Mid-term goals likely need more than a few weeks to accomplish. Some could even take a couple of years. The best way to accomplish these? Break them down into smaller chunks within your yearly goals. 

Saving for a $50,000 down payment on a home? Plan to save $10,000 each year towards that goal. But don’t just stop there; break the goals down further. Ask yourself, how will I save $10,000 this year? Figure out a safe savings rate that you can reasonably pull off each month to hit that goal. Take it a step further and break it down into weekly goals.

The only way to move forward is one step at a time, and breaking out these goals into weekly targets will help you achieve the little goals that will ultimately allow you to find success with the big goal!

5. Immerse yourself in things to help you succeed

The road to success isn’t always a straight line, but one way to get it to be as straight as possible is to seek advice and focus on your self-improvement. Now you might be saying to yourself, “I have people who I would love to mentor me, but there is no way that I will ever have access to them.”

You’re probably right. You might never be able to have one on one meetings with those people, but that doesn’t mean you still can’t learn from them. Huge fan of someone? Read the book. Listen to their podcast. Take one of their online courses. Nowadays, information is readily available at the touch of a button.

Education could be a great goal to include as part of your 5-year financial plan, and you can slice it and dice it in many different ways, such as reading one or two new books every month or listening to a podcast while going about your daily routine.

Immersing yourself in helpful material has never been easier! Not only does it give you a tactical approach to making positive changes in your life, but it also changes your mindset, which is the starting point to living the life you desire.

While digital media is good, in-person interactions are equally important. Common wisdom has it that we are the average of the five people we hang out with most. Take time to seek out mentors who have walked the path you hope to walk on successfully and who are good examples of where you hope to see yourself five years from now.

6. Journal to reflect

Writing down your 5-year goals is a great first step, but what will really help you keep your momentum up is journaling. Writing can be done in many different ways. You can choose to focus on what you’ve achieved so far; you can journal about the challenges you’re facing as you go, or, one of my favorites – you can journal as yourself 5-years from now, having achieved all that you dreamed you would.

Going into the future and looking back can help you overcome some of the mental barriers, such as fear, that can make some dreams seem impossible. Journaling can help you to bridge that gap and get you closer to achieving your goals! There’s a psychology around why we spend too much and don’t concern ourselves with tomorrow.

Some will call it YOLO. Others feel that it's not worth dedicating so much time and effort to, but those who have done it have zero regrets. In fact, many will tell you that their fortunes changed once they became intentional about their longer-term goals.

5-Year plan example

If you need a little help seeing what your plan would look like, here is a 5-year plan example to use as a guide. Remember these goals can be achieved over a five-year period but the faster you accomplish paying off debt and saving the better!

Increase your income each year

To make the rest of your 5-year plan easier, the first step is to increase your income. Bringing in more money means you can bulk up your savings faster and pay off debt quicker.

It's a good idea to create a plan to increase your income each year. This could be from factoring in annual bonuses and pay raises into your goal. However, it's important to keep in mind that this will be dependent on how your employer's business does and you meeting your performance expectations.

You can also look for ways to make more money, such as starting a side-hustle, asking for a raise, or getting a part-time job. Some side-hustles can bring in over $20 an hour! That's quite a bit of cash that could go towards your goals.

Fully fund an emergency account

An emergency fund is one of the most important parts of a financial plan. This money is tucked away for unexpected events such as a job loss or an unforeseen auto repair.

The ideal amount to have in your emergency savings is 3-6 months of basic living expenses. If that seems a bit out of reach within a year, you can work on your first $1,000 and grow from there.

You can create a yearly of much much you'd like to save for emergencies each year for the next five years. Take this and break it down into how much you need to aim to save each month.

If you have to spend the money for an emergency, that's what it's there for. Create a plan to replenish your account once the emergency is resolved.

Pay off credit card debt

If you carry balances on your credit card, then your goal after building an emergency fund should be to wipe out any balances you have. High-interest credit cards will eat up your money fast, so it's essential you get rid of them as quickly as possible.

You can create a 5-year to pay off your debt if you are unable to do it sooner. Determine how much you'd need to pay yearly and then break it down by month. Try using the debt snowball method to make it easier to achieve.

This method has you pay the lowest balance off first, then apply that amount to the second smallest balance in addition to your minimum payment, and repeat the process until all of your cards are paid off.

Start paying off other loans

This may take the remainder of your 5-year financial plan but do your best to work on paying off the rest of your loans. These could include auto loans, student loans, and any other secured or unsecured debt you have.

If you aren't able to fully pay them off, do your utmost to pay as much towards the balances, so you end up paying less interest over time. Be sure to break down your numbers of what you need to pay each month during your 5-year plan so you can budget accordingly.

Grow your money by investing

The path to wealth is making your money work for you. So investing should be a part of your 5-year financial plan. The good news is you don't need a lot of money to get started.

You also want to diversify your portfolio among different types of investments—such as stocks, bonds, and other types of assets. The sooner you start, the better off your retirement savings will be.

Use this 5-year plan example to help you create a customized plan for yourself!

Create a 5-year plan for financial success!

So, now you know exactly how to make a 5-year plan for your finances. Remember to use a 5-year financial plan template or make your own to help visualize your goals.

If you’re looking for additional resources to help you get started financially, check out our free financial roadmap – an excellent tool to help you transform your money mindset and lay a strong foundation for success.

Remember, it’s never too late to start taking control of your financial future. Also, be sure to follow Clever Girl Finance on Instagram, TikTok, YouTube, and Facebook for more great money tips and inspiration!

Scroll to Top