Planning for the Future

By Kelly Boyer Sagert · September 20, 2023 · 7 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Planning for the Future

To achieve such future milestones as buying a house, paying for your children’s education, and saving for retirement, it’s important to have a solid financial plan in place.

To get started, it can help to prioritize your goals. You can determine where you are right now financially, and then set, implement, and track your goals — making tweaks needed.

Setting Goals: What and Why

How you plan for your future depends, in large part, on what your goals are. Common achievements people often work toward include these:

•   paying down debt

•   saving for retirement

•   buying a home

•   starting a family

•   traveling

You may well have other goals that aren’t included on this list. As you decide what’s most important to you, also consider the “why” of it all.

Paying down debt, for example, may be a priority because the less interest you pay on outstanding debts, the more money you can save and invest to reach the other items on your list.

When you know why you’re moving towards a certain goal, it can provide powerful motivation for you to stay the course, even if something unexpected happens — whether the furnace breaks down or you have unexpected medical bills to pay.


💡 Quick Tip: If you’re opening a brokerage account for the first time, consider starting with an amount of money you’re prepared to lose. Investing always includes the risk of loss, and until you’ve gained some experience, it’s probably wise to start small.

Understanding the Now

Another critical step for planning for the future includes calculating where you are right now. This includes things like:

•   your assets (what you own)

•   your debts (what you owe)

•   your income (what you bring in)

•   your expenses (what you pay out)

Your savings can be determined by adding up what’s in your checking and savings accounts, including your emergency fund. Be sure to include what you’ve put away into retirement accounts.

To determine your debt, consult the statements from your credit cards, student loans, and any other loans you have. Add up the outstanding balances.

As far as income goes, tally up how much you make monthly from wages/salaries, bonuses, and so on. Rather than using gross income amounts, it might be more helpful to consider your take-home pay.

Then, list your fixed expenses, which could include your rent or mortgage payment, monthly utilities, property taxes (if applicable), insurance premiums, prescription costs, groceries, gas, and so forth. Also look at what you spend on clothing, hobbies, entertainment, and dining out.

You can track all this on paper or in a spreadsheet, or you could use an online tool like SoFi to track your spending. These tools can provide a look at your spending patterns as well as help you identify recurring charges you may have forgotten about.

Creating a Financial Plan

When thinking about how to plan for the future, it might be helpful to connect the dots between where you are today and where you want to be to achieve the goals you’ve set.

As just one example, let’s say you have a goal to pay down debt. If you examine your finances more closely, then perhaps you decide that it’s really a two-pronged issue, and that you need to:

•   accelerate how quickly you’re paying back your student loan debt

•   pay off your credit card debt to reach the point where you can pay off your outstanding balances monthly

You could set a target date to accomplish each of these debt-reduction goals and then figure out how much more you would need to pay each month to make that happen.

Paying down debt is just one goal. What can you do, though, if you have multiple goals to accomplish? If that’s the case, prioritizing your goals may make the most sense. After all, if you try to do too much all at once, you may not see progress quickly enough and this could result in a loss of motivation.

Here’s one more thing to consider as you create your financial plan. It may be tempting to focus on just debt reduction (and, in some cases, that could be the right strategy), but it might also help to cultivate a pay-yourself-first attitude.

With this philosophy, the top priority is to put a predetermined amount of money into personal savings and investment accounts. When this is your main focus, it can help to ensure your discretionary spending doesn’t cut into your financial growth.


💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.

Implementing Your Plan

Once you’ve formulated a plan, it’s time to put it into action. If, using the previous example, you want to pay off student loan debt, now might be the time to increase your payments by appropriate amounts to pay them off by your target date. A next possible step? Automate those payments to reduce the amount of time spent on managing this part of the plan.

If your goal is to save more money, the same concept can apply. Determine how much money should come out of your paycheck monthly and then you could automate that part of the plan by using direct deposit.

If you’re ready to open a retirement account, you might consider a Traditional IRA or Roth IRA. For non-retirement accounts, you might consider a bank account or an investment account.

Monitoring Your Progress

As you automate payments, you’re using a set-it-and-forget-it strategy, freeing yourself up to work on other parts of your plan. And, that will likely include at least an annual review — or perhaps you prefer to do it biannually or quarterly — to see how it all is progressing.

Some people like to do that as part of ushering in the new year. Others may prefer spring, right around tax time, while still others might like to review their plan in the fall when they’re making employee benefits decisions. As with most parts of your unique plan for your future, there are many ways to do it right. It all depends on the individual.

If you discover that you need help with your plan or have questions, it could make sense to speak to a financial planner.

Investments: Planning for the Future

No two investors are alike. Having said that, there are patterns of investing and, if you know which kind of investor you are, it can help you to put your investments to work in a way that dovetails with your personality and your tolerance for risk. In general, there are three investor types:

•   active investor

•   passive investor/low-maintenance investor

•   hands-off investor/automatic investor

Once you determine what kind of investor you are, you can determine what kind of investing works best for you.

Active Investing

If you want to be involved in each aspect of investing, embracing a hands-on approach, you may be an active investor vs. a passive investor. This type of investor buys stocks or other investments, and likely does research to decide which types of investments to make.

An active investor can have a professionally managed portfolio or they could choose to manage their own portfolio, if they believe they have the skills and expertise to do so. But there are risks involved, which include potentially losing money, so you’ll need to figure out how much risk you are comfortable with.

Passive Investor/Low-Maintenance Investor

If you like the idea of investing but don’t want to be significantly involved in making investment decisions, then you may fall into the passive investor category. This could mean that you have a “buy-and-hold” philosophy where you buy securities and plan to hold on to them for a longer period of time, throughout fluctuations of the market.

Or, it could mean that you’re open to more activity on your investment account, but you don’t want to spend much personal time studying the market, rebalancing your portfolio, and otherwise handling all the details. If this sounds like you, then you may want to consider automated investing.

Automated Investing

Automated investing uses computer algorithms to generate tailored investment advice and financial planning. It may reduce the learning curve for some beginner investors, helping them start building and managing a portfolio to achieve their financial goals.

Automated investing uses computer algorithms to select and trade stocks, exchange-traded funds (ETFs), or other assets.

The way the process typically works is that an interested investor takes an online survey about their financial situation, risk tolerance, and goals. The automated investing platform then uses this data to recommend investments to the client. Based on the investor’s input, the automated investing platform will recommend and manage a pre-determined portfolio for the investor.

Investing With SoFi

Think about the goals you have for your future and the role that investments can play in helping you achieve those goals. No one plan will work for every investor — everybody’s financial situation is different. But no matter what goals you’ve set, and what type of investor you are — active, passive, or automatic — you can create a plan that’s uniquely yours.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).


Invest with as little as $5 with a SoFi Active Investing account.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

SOIN0923001

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender