The path to financial security doesn’t happen by accident — it requires a structured, thoughtful approach based on proven methodology used by certified financial planners worldwide. Whether you’re saving for retirement, protecting your family, building wealth, or preparing for major life events, understanding the 7 step financial planning process empowers you to make informed decisions about your money and future. This comprehensive framework, developed and refined by the CFP® Board and used by financial professionals across the United States, transforms vague financial concerns into clear, actionable strategies that adapt to your unique circumstances.
What You’ll Discover: The 7 step financial planning process is a comprehensive methodology that guides both professional advisors and individuals through the complete journey from understanding current financial circumstances to achieving long-term goals. These seven steps — understanding your situation, identifying goals, analyzing alternatives, developing recommendations, presenting your plan, implementing recommendations, and monitoring progress — form an integrated approach that addresses all major areas of personal finance including cash flow, debt management, retirement planning, investment strategy, tax optimization, insurance protection, and estate planning.
Unlike generic financial advice or ad-hoc product recommendations, the 7-step process ensures nothing falls through the cracks. Every recommendation connects logically to your specific situation and priorities. This guide explores each step in depth, providing the same framework professional financial planners use to help clients build lasting wealth and financial security.
Step 1: Understand Your Personal and Financial Circumstances
The foundation of any effective financial plan is complete and accurate understanding of where you currently stand — both financially and personally.
Why This Step Matters
You cannot build a realistic plan to reach your destination if you don’t understand your starting point. Many people skip this critical phase, either out of impatience or anxiety about confronting their financial situation. However, rushing past this step inevitably leads to recommendations that don’t fit your actual circumstances, creating plans that fail when implemented.
Gathering Quantitative Information
Professional financial planners collect detailed quantitative (numerical) data including:
Income and Cash Flow
- Gross and net annual income from all sources
- Employment income, self-employment income, rental income, investment income
- Bonuses, commissions, and variable income sources
- Government benefits (Social Security, pension, unemployment, disability)
- Monthly and annual cash flow patterns
Assets and Liabilities
- Bank accounts, savings, money market accounts
- Investments: stocks, bonds, mutual funds, ETFs
- Retirement accounts: 401(k), IRA, Roth IRA, SEP-IRA, Solo 401(k)
- Real estate (primary residence, rental properties, investment real estate)
- Personal property (vehicles, jewelry, collectibles)
- All debts: mortgage, student loans, credit card debt, car loans, personal loans
Insurance and Benefits
- Health insurance coverage and out-of-pocket limits
- Life insurance policies and death benefits
- Disability insurance and coverage amounts
- Employer benefits: retirement plans, health savings accounts (HSAs), employee stock purchase plans
- Property and liability insurance
Tax Information
- Previous tax returns (typically last 3 years)
- Tax filing status and deductions
- Tax brackets and estimated tax liability
- Estimated tax payments and withholdings
Gathering Qualitative Information
Beyond numbers, financial planners explore the personal dimensions that shape financial decisions:
Family and Life Circumstances
- Family structure: marital status, children, dependents
- Ages of family members and major life stage transitions
- Health status and anticipated healthcare needs
- Career stage and employment stability
- Expected inheritance or large financial events
Values, Goals, and Priorities
- What matters most to you (family, experiences, security, independence, legacy)
- Your financial goals and their importance rankings
- Your dreams and aspirations beyond money
- Your priorities when resources are limited
Risk Tolerance and Capacity
- Your emotional comfort with investment risk
- Your ability to absorb financial losses
- Your time horizon until you’ll need the money
- Your financial stability (job security, income stability, emergency reserves)
Attitudes About Money
- Your spending and saving habits
- Your attitudes toward debt
- Your beliefs about money and financial security
- Past financial experiences that shape current behaviors
The Discovery Process
Gathering this information typically involves:
- Initial meeting where you discuss financial goals, family situation, and priorities
- Financial questionnaire or data-gathering form you complete at home
- Document collection of tax returns, account statements, insurance policies, mortgage documents
- Follow-up conversations to address gaps or clarify information
- Review and verification to ensure all information is complete and accurate
Why Completeness Matters
Incomplete information inevitably leads to incomplete or inappropriate recommendations. For example, if your advisor doesn’t know you have elderly parents you’re helping support, they might recommend aggressive savings for retirement that’s unrealistic given your actual cash flow. If they don’t understand your risk tolerance, they might recommend a portfolio that causes you stress during market downturns, leading you to make poor decisions at exactly the wrong time.
Step 2: Identify and Prioritize Your Financial Goals
With a clear understanding of your current situation, the next step is defining specifically where you want to go.
Why Goal Setting is Critical
Financial planning without clear goals is like a road trip without a destination — you might travel far but never arrive anywhere meaningful. Specific, prioritized goals transform vague aspirations (“I want to be financially secure”) into measurable targets (“I want $1.2 million in retirement savings by age 65 so I can retire with $60,000 annual spending”) that guide all subsequent planning decisions.
Moving from Dreams to SMART Goals
The framework many planners use is SMART goals — Specific, Measurable, Achievable, Relevant, and Time-bound:
Specific: Clearly define what you want to achieve. Instead of “save for retirement,” identify specific retirement goals: “retire at age 65 with $80,000 annual spending” or “retire at 62 with a second home in Colorado.”
Measurable: Quantify your goals with numbers, timelines, and metrics. “Build wealth” becomes “$500,000 net worth by age 50.” “Fund college” becomes “$250,000 for three children’s in-state universities.”
Achievable: Goals should be challenging but realistic based on your actual circumstances, income, and resources. A $50,000-per-year earner achieving $1 million in retirement savings within 20 years is challenging but achievable. Achieving it in 5 years is likely unrealistic and creates planning failure.
Relevant: Goals should align with your values and life priorities. If you value family experiences over material possessions, a goal of “minimize spending and maximize investment returns” contradicts your actual priorities. Better: “spend $5,000 annually on family experiences while saving $15,000 for retirement.”
Time-bound: Assign specific timelines: “Save $20,000 within 2 years for down payment,” not “save for a house someday.”
Common Financial Goals
Most people’s financial plans include goals in several categories:
Short-Term Goals (1-3 years)
- Build emergency fund of $15,000-$30,000
- Pay off credit card debt
- Save for a vacation or purchase
- Cover upcoming education costs
- Finance a vehicle purchase
Medium-Term Goals (3-10 years)
- Save down payment for home (20% of purchase price)
- Complete education or training
- Fund children’s education
- Build business capital
- Switch careers
Long-Term Goals (10+ years)
- Retire at specific age with specific spending level
- Build multi-generational wealth
- Leave inheritance to children or charity
- Fund lifelong experiences and travel
- Maintain lifestyle in retirement
Prioritizing Competing Goals
Nearly every person has more aspirations than resources to fund them all simultaneously. Prioritization forces conscious choices about what matters most:
- List all goals you want to achieve
- Estimate cost and timeline for each goal
- Evaluate total required funding — are resources available or must some goals be delayed?
- Rank goals by priority — which matter most if you can’t fund everything?
- Create phased approach — fund highest-priority goals first, then address secondary goals
For example, a 30-year-old might prioritize: (1) Emergency fund (essential foundation), (2) High-interest debt elimination (prevents wealth-building), (3) Retirement savings (time-sensitive due to compound growth), (4) Children’s education funding (important but can use combination strategies), (5) Home down payment (important but can adjust timeline if needed).
Step 3: Analyze Your Current Course of Action and Alternatives
Now you understand where you are and where you want to go. The next step evaluates whether your current path will get you there — and explores alternatives if gaps exist.
The Gap Analysis
This step answers the crucial question: “If I continue my current financial behaviors, will I achieve my goals?”
Current Situation Analysis includes:
- Are you saving enough to reach retirement goal by target date?
- Is your current investment allocation appropriate for your time horizon and risk tolerance?
- Are you adequately protected by insurance against major risks?
- Is your cash flow sufficient for your goals or will you need to adjust spending?
- Are you on track with existing goals, or falling behind?
Example Gap Analysis
Suppose your goal is to retire at 65 with $80,000 annual spending and you’re currently 40 years old. Analysis reveals:
- You have $150,000 in retirement savings
- You’re saving $12,000 annually
- You need $2 million in retirement assets (using a 4% withdrawal rate)
- At 6% average returns, your current path reaches only $850,000 by age 65
- Gap identified: You’ll be short approximately $1.15 million
This quantified gap immediately reveals that “continue doing what you’re doing” won’t work. You need alternatives.
Exploring Alternative Strategies
Once gaps are identified, multiple strategic alternatives emerge:
For the retirement shortfall example, alternatives include:
- Increase savings: Increase annual savings from $12,000 to $20,000 — reaches goal
- Retire later: Work until 70 instead of 65 — gives 5 more years for savings accumulation and withdrawal postponement
- Reduce spending goal: Target $60,000 annual spending instead of $80,000 — requires less retirement assets
- Increase returns: Adjust asset allocation to higher-returning investments (if risk tolerance allows) — improves growth rate
- Combination approach: Increase savings $5,000, work to 67, and target $70,000 spending — achieves goal with balanced adjustments
Evaluating Each Alternative
For each alternative strategy, financial planners consider:
- Feasibility: Can you actually implement this? (Can you realistically save $20,000/year?)
- Impact on other goals: Does this alternative help or hurt other priorities? (Higher savings for retirement might delay home purchase)
- Risk factors: What could derail this approach? (Job loss makes high savings unrealistic)
- Flexibility: Can you adjust course if circumstances change?
- Alignment with values: Does this feel right given your priorities?
Trade-offs and Priorities
Rarely is there one perfect alternative. Usually multiple paths to your goals exist, each with different trade-offs:
- Save more vs. retire later (affects current lifestyle vs. future work years)
- Aggressive returns vs. safety (potential gains vs. stability)
- Fund all goals vs. prioritize (completeness vs. realism)
- Do it alone vs. get professional help (independence vs. expert guidance)
This step ensures planning recommendations emerge from conscious choice among evaluated alternatives rather than default assumptions.
Step 4: Develop Financial Planning Recommendations
With thorough understanding of your situation, clear goals, and analyzed alternatives, you now develop specific recommendations tailored to your unique circumstances.
The Integrated Recommendation Approach
Rather than isolated recommendations (increase 401(k) savings, buy disability insurance, create a will), comprehensive financial planning integrates recommendations across multiple financial areas:
Core Planning Components
Most financial plans address multiple integrated areas:
Cash Flow Management and Budgeting
- Optimize your income and spending relationship
- Eliminate debt strategically
- Fund emergency reserves
- Create sustainable monthly budget aligned with goals
Investment Strategy and Asset Allocation
- Determine appropriate mix of stocks, bonds, and other assets
- Balance growth potential with risk tolerance
- Consider tax-efficiency of investments
- Align investments with time horizon for each goal
Tax Planning
- Minimize current and future tax liability legally
- Maximize tax-advantaged retirement contributions (401(k), IRA, HSA)
- Implement tax-loss harvesting strategy for taxable accounts
- Plan for future tax obligations (capital gains, retirement distributions)
- Consider tax-efficient investment locations
Risk Management and Insurance
- Identify major financial risks (premature death, disability, major illness, liability)
- Recommend appropriate insurance: life, disability, health, property, liability
- Balance insurance costs with protection needs
- Review existing coverage adequacy
Retirement Planning
- Project income needs in retirement
- Determine required retirement savings
- Create retirement income strategy (Social Security timing, distributions, sustainable withdrawal rates)
- Plan for healthcare costs in retirement
Education Funding
- Estimate college or education costs
- Recommend savings vehicles: 529 plans, Coverdell ESAs, direct savings
- Plan for funding strategy: savings, financial aid, borrowing
Estate Planning
- Review and update beneficiary designations
- Create or update will reflecting current circumstances
- Consider trust vehicles if appropriate
- Plan for charitable giving if desired
Debt Management
- Evaluate current debt: mortgage, student loans, credit cards, auto loans
- Recommend repayment strategies: accelerated payoff vs. minimum payments
- Decide between refinancing opportunities and current terms
- Plan for strategic use of “good debt” (mortgage, student loans) vs. elimination of “bad debt” (credit cards)
Creating Your Personalized Plan
The recommendations that emerge reflect the prioritization and trade-offs you’ve chosen:
If retirement is highest priority with limited resources, recommendations might emphasize:
- Aggressive retirement savings
- Tax-advantaged contributions maxed out
- Delayed college funding (using current costs vs. saved funds)
- Appropriate insurance but not premium coverage
If near-term goals dominate, recommendations might emphasize:
- Near-term savings for down payment on home
- Adequate emergency fund built quickly
- College funding that balances current saving with future borrowing
- Moderate retirement savings increasing later when near-term goals achieved
Building in Flexibility and Contingencies
Comprehensive recommendations include scenarios and contingency plans:
- Projections showing outcomes under different economic scenarios (market returns, inflation rates, interest rates)
- Alternative strategies if major assumptions change (job loss, health crisis, inheritance)
- Triggers for plan adjustments (if investment returns lag assumptions, if career changes, if family circumstances shift)
- Flexibility built into recommendations to adapt as life evolves
This fourth step transforms analysis into specific action-oriented recommendations prioritized to create the greatest positive impact on your financial life.
Step 5: Present Your Financial Plan
A comprehensive financial plan matters little if you don’t understand it. This step focuses on clear communication, ensuring you fully grasp recommendations and their rationale before implementation.
The Presentation Approach
Professional financial planners approach presentation with several key principles:
Clear Language Without Jargon
Financial terminology can obscure meaning. Effective communication translates concepts into understandable terms:
Instead of: “Institute a systematic asset allocation strategy with quarterly rebalancing utilizing a multi-asset-class approach”
Say: “We’ll split your investments across stock funds and bond funds. Each quarter, we’ll adjust to maintain your target mix.”
Visual Communication
Complex financial concepts become clearer with visual representation:
- Charts showing growth projections: Illustrate how retirement savings will grow if you follow the plan
- Pie charts showing allocation: Display investment mix across asset classes
- Timeline graphics: Show when major milestones will occur (college starts, mortgage paid off, retirement date)
- Comparison tables: Show impact of different scenarios (retire at 62 vs. 65 vs. 70)
Written Documentation
Beyond verbal discussion, comprehensive written plans document:
- Your situation and goals
- Analysis and assumptions underlying recommendations
- Specific recommendations with implementation steps
- Projected outcomes if recommendations are followed
- Risks and contingencies
- Monitoring and review process
- Roles and responsibilities
Facilitating Understanding and Agreement
Effective presentation invites dialogue rather than one-directional delivery:
- Explain the “why” behind recommendations, not just the “what”
- Invite questions and address concerns
- Discuss alternatives you considered and why you recommend this approach
- Understand any discomfort with recommendations before implementation
- Modify recommendations if client preferences warrant adjustment
For example, rather than: “You need to move $10,000 annually to a Roth IRA,” effective communication explains: “We identified an opportunity to convert some of your traditional IRA to a Roth. This would cost you about $2,500 in taxes this year but provide tax-free growth for 30+ years. If average returns are 6%, this costs you $2,500 today but saves you approximately $80,000 in future taxes. Here’s why it makes sense for your situation…” Then allows discussion of concerns.
Step 6: Implement Your Financial Plan Recommendations
Understanding and agreeing to a plan means nothing until recommendations are actually implemented. This step transforms strategy into action.
Creating an Implementation Timeline
Effective implementation requires sequencing recommendations in logical order:
Foundation First
- Establish emergency fund before aggressive investing
- Establish disability insurance before maximizing retirement savings
- Stabilize cash flow and eliminate high-interest debt before investing
Early Implementation
- Maximize tax-advantaged retirement contributions (401(k), IRA, HSA)
- Establish automatic savings transfers
- Update insurance coverage
- Begin employer benefits enrollment
Secondary Implementation
- Open and fund investment accounts
- Implement investment strategy and asset allocation
- Update beneficiary designations
- Establish college savings vehicles
Ongoing Implementation
- Maintain emergency fund contributions
- Quarterly/annual portfolio rebalancing
- Tax planning decisions
- Regular plan reviews and monitoring
Action Steps and Responsibility Assignment
Clear action plans assign specific responsibility:
What needs to be done? (Specific action: “Open Roth IRA account,” not “Roth IRA planning”)
Who is responsible? (You, your advisor, other professionals like CPA or attorney)
Timeline? (Complete by specific date: “October 15, 2025”)
How will it be tracked? (How will you know it’s completed?)
Coordinating Multiple Professionals
Complex plans often require coordination among professionals:
- CPA or tax advisor: Tax planning, retirement distribution strategies, business structure
- Estate planning attorney: Will, trust, beneficiary designations
- Insurance agent: Life, disability, property insurance
- Investment advisor: Investment management
- Employer benefits administrator: Retirement plan options, benefits enrollment
- Financial planner: Overall coordination and integration
Your financial planner may serve as coordinator, ensuring all professionals align with overall plan strategy.
Overcoming Implementation Barriers
Even well-designed plans sometimes stall during implementation. Common barriers include:
Complexity: Breaking large plans into manageable steps improves execution.
Inertia: Automation removes the need for repeated decisions (automatic retirement contributions, automatic rebalancing).
Conflicting priorities: Revisiting prioritization helps when multiple simultaneous actions feel overwhelming.
Uncertainty or anxiety: Clear explanations of “why” ahead of implementation address concerns.
Lack of accountability: Regular check-ins with your advisor or accountability partner maintains momentum.
Step 7: Monitor Progress and Update Your Plan
The financial planning process isn’t a one-time event — it’s an ongoing cycle. Regular monitoring ensures your plan adapts to changing circumstances and remains on track toward your goals.
Why Monitoring Matters
Plans fail most often not because of poor design but because they’re abandoned when circumstances change:
- Market downturns cause emotional reactions that override strategy
- Major life changes (job loss, health crisis, inheritance, marriage, children) create new realities
- Progress toward goals is faster or slower than projected
- Assumptions change (inflation higher than expected, investment returns lower)
- New opportunities emerge (bonuses, promotions, side income)
Without regular monitoring, these changes go unaddressed until they derail the plan entirely.
Regular Monitoring Activities
Comprehensive monitoring includes multiple checkpoints:
Annual Comprehensive Review
Once yearly, conduct full review of your plan:
- Performance review: How did your investments perform? Are you on track toward goals? Are goal dates still realistic?
- Assumption review: Have economic assumptions changed? (inflation higher, interest rates different, market returns?)
- Situation review: Major changes in family, income, employment, health, or priorities?
- Recommendation review: Do existing recommendations still make sense given changes?
- Adjustment discussion: Should plan be modified based on review findings?
Quarterly Account Reviews
Between annual comprehensive reviews, conduct lighter quarterly check-ins:
- Review account balances and investment performance
- Confirm automatic contributions are processing
- Identify any unusual activity or concerns
- Track progress toward intermediate milestones
- Rebalance portfolio if allocations have drifted significantly
Event-Based Reviews
Major life changes warrant plan review regardless of schedule:
- Job change (promotion, new income level, loss of job)
- Family changes (marriage, divorce, birth of children, death of family member)
- Inheritance or major financial windfalls
- Major expense (home purchase, vehicle, medical event)
- Health changes affecting work capacity or life expectancy
- Retirement or major career transition
Monitoring Metrics and Key Performance Indicators
Clear metrics enable objective assessment of progress:
Savings Rate Tracking
- Are you saving the targeted amount monthly/annually?
- Is automatic savings functioning properly?
Investment Performance Monitoring
- Are investments meeting expected return assumptions?
- How do returns compare to appropriate benchmarks?
- Have market volatility caused significant portfolio drift?
Goal Progress Assessment
- On track for retirement savings target by target date?
- Accumulating education funds as planned?
- Debt reduction progressing toward payoff date?
Net Worth Growth
- Is overall net worth increasing as projected?
- Are assets growing and liabilities declining?
Cash Flow Management
- Are actual income and expenses tracking to budget?
- Are spending patterns changing?
- Are debt payments on schedule?
Plan Adjustment Triggers
Plans should specify conditions prompting recalibration:
- If investment returns lag assumptions significantly (actual returns 2-3% below projected for 12+ months): Review asset allocation and return expectations
- If major life change occurs: Immediately review all plan components affected by change
- If spending or savings patterns change significantly (saving 30% less or 30% more than planned): Reassess feasibility of goals
- If market conditions shift dramatically (prolonged bear market, significant inflation, interest rate changes): Review portfolio strategy
- If progress significantly lags timeline (only 60% of target savings reached by midpoint of timeline): Adjust strategy to get back on track
Avoiding Common Monitoring Mistakes
Over-monitoring (Obsessive Daily Checking)
Daily account checking often creates emotional reactions to normal fluctuations. Monthly or quarterly reviews provide sufficient monitoring without volatility-induced anxiety.
Under-monitoring (Neglecting Annual Review)
Some people set up a plan and ignore it for years, missing opportunities to adjust for changed circumstances.
Monitoring Without Action
Reviews that identify problems but result in no plan adjustments create false sense of monitoring while problems accumulate.
Comparison to Inappropriate Benchmarks
Comparing your moderate-risk portfolio to aggressive stock market indices creates unhelpful pressure to take excessive risks. Compare to appropriate benchmarks aligned with your strategy.
Continuous Improvement
Monitoring also creates learning and improvement opportunities:
- Identify what’s working well and continue it
- Recognize what’s not working and adjust
- Understand your emotional responses to market changes
- Learn about new opportunities or products that better serve your goals
- Refine strategy based on actual experience over time
This seventh step completes the cycle — creating feedback that improves future planning cycles and keeps your financial life on track despite inevitable changes in circumstances, markets, and personal situations.
Integrating Components: The Connected Financial Life
While each of the 7 steps is distinct, their power emerges through integration. A comprehensive financial plan isn’t a collection of isolated recommendations but an interconnected strategy where each element supports the others:
Example: Integration in Action
Consider someone earning $100,000 annually with goals including retirement at 65, home purchase in 5 years, and $250,000 emergency fund:
Step 1 Analysis reveals: Current savings rate is $12,000/year, but cash flow analysis shows additional $200/month ($2,400/year) is available if credit card debt is eliminated.
Step 2 Goals clarify: Priority ranking shows home down payment urgent, retirement important, emergency fund good-to-have.
Step 3 Gap analysis reveals: Current path reaches only 60% of retirement goal by 65.
Step 4 Recommendations integrate:
- Eliminate $8,000 credit card debt (highest interest) first (3 months)
- Build $15,000 emergency fund (15 months)
- Redirect freed-up credit payments + existing $2,400 to retirement savings
- Save $5,000 annually toward home down payment
- Implement tax strategy maximizing 401(k) and Roth IRA
Step 5 Presentation shows: How debt elimination, emergency fund, and increased retirement savings are sequenced to optimize both near-term (home purchase) and long-term (retirement) goals.
Step 6 Implementation executes: Clear timeline prioritizes high-interest debt first, then emergency fund, then investment strategy.
Step 7 Monitoring confirms: Quarterly reviews verify debt elimination is on schedule, emergency fund is building, home savings target is achievable, and retirement contributions are invested appropriately.
Common Financial Planning Mistakes to Avoid
Understanding the 7-step process helps avoid common pitfalls:
Skipping the Circumstance Understanding
Many people proceed to goal-setting and recommendations without thoroughly understanding their current situation. This inevitably creates unrealistic plans that fail.
Setting Unrealistic Goals
Goals should be ambitious but achievable. Setting goals that require 40% of income (when income supports only 15% savings) guarantees frustration.
Ignoring Risk Tolerance
Recommending aggressive portfolios to conservative investors leads to poor decisions during volatility. Align investment strategy with actual risk tolerance.
Failing to Integrate Recommendations
Viewing recommendations in isolation (“I’ll increase retirement savings” without addressing debt) often means recommendations conflict with each other.
Passive Implementation
Setting up a plan but failing to implement it leaves you where you started.
Abandoning Plans When Markets Decline
Most plan failures occur during market downturns when emotional responses override long-term strategy. Good plans include volatility expectations and contingency strategies.
Never Monitoring or Adjusting
Plans created in 2015 that haven’t been revisited reflect outdated assumptions and miss opportunities to adjust for life changes.
Conclusion: Your Financial Planning Foundation
The 7 step financial planning process provides a comprehensive framework for building lasting financial security. Rather than reactive decision-making or generic financial advice, this methodology ensures every financial decision connects logically to your specific situation and values.
By understanding your current circumstances thoroughly, defining clear goals, analyzing alternatives, developing integrated recommendations, communicating clearly, implementing systematically, and monitoring continuously, you transform abstract financial concerns into concrete progress toward a financial life that truly serves your values and goals.
Whether you work with a professional financial planner or apply these principles yourself, this framework provides the structure for financial planning that actually works — planning that adapts to life’s inevitable changes while keeping you oriented toward goals that matter most.
Start with Step 1: Get crystal clear on your current financial reality. Everything else builds from this foundation.
👉 Ready to Strengthen Your Financial Foundation?
Before implementing detailed financial planning recommendations, ensure you have the essential safety net. Use our free Emergency Fund Calculator to determine exactly how much emergency savings you need for your situation and family size — then you’ll know how to prioritize this critical foundation within your 7-step financial plan. A solid emergency fund is the platform on which all other financial security is built.