Navigating through our financial life is a lot like navigating across country by car. First, you have to determine your destination. Next you have to determine where you will stop in between. Then you evaluate the different routes that will get you to those stops, and eventually, you reach your final destination. The alternative is to simply hop in the car and head out on a road trip and see where we end up.

While the freedom associated with hopping in the car and just getting on the road may sound appealing, my indecisiveness would make it a stress-filled trip and I’d probably end up lost with my car flipped over in a ditch. This is why I always map out my road trips (or at least rely on my GPS!). And why should our finances be any different?

Plan: To be debt-free

When I graduated college I had $43k in student loans so I had an easy target. My first goal out of college was to become debt-free. I then proposed to my current fiancé around the time I became debt free, so funding my future wedding (next year) became my next easy target.  Each of these goals just seemed like the most logical for me at the time and they didn’t involve too much thinking. But now that I’m debt-free and my wedding is paid for, I’m at the point now where I actually have to think and plan my financial future. When working to create my goals for 2013, I realized that I no longer had any easy targets I could pick off. To plan my goals for 2013 I’m creating my first financial blueprint, and I think it’s something we should do together.

Plan: Your life

First, let’s take a few minutes to dream. Walk away from the computer, turn off the cellphone, grab a piece of paper and maybe step outside if you have some grass to sit on, or just plop down on the couch. Write down some ideas that describe where and who you want to be in twenty years. This is your wish list so feel free to dream big. Money should not be a consideration for any of these goals. In 20 years, I personally would like to be working on my own as some combination of CFO/marketing consultant. I want to fully own my home (no mortgage) and I want to have the flexibility to be involved in the activities of my children, as well as travel. Where are you living in twenty years? What are you doing? Are you a freelance consultant? Do you surf the waves each morning before working from home? Do you have a vacation home in Italy? These are our long term goals, and they’re the final destination in our financial blueprint.

Plan: Your pit stops

Now that we know our final destination we can finally choose our stops along the way. When thinking through it this way I now realize just how important it is to think about the final destination before determining the intermediary stops. What must you do in the next five to ten years to be able to reach your long term goals? For me, I need to purchase a home in about five years and then work aggressively toward paying down the mortgage in order to be mortgage-free in twenty years. I’ll also need to hone my accounting/finance skills, as well as my knowledge of marketing and psychology. What are your stops? Will you have to go back to school? Should you obtain an industry certification? Do you need to quit that comfortable job to pursue that better-paying job you know you’ve always deserved? These are our intermediate goals.

Plan: Your goals

Now that we have established future goals it’s time to determine what needs to be accomplished in the next three years to reach those intermediary goals. This is when money begins to take a prominent role in our goals because, if you’re like me, your intermediate and long-term goals require you to be on solid financial footing. My goals require me to save aggressively now toward a down payment on a home as well as toward retirement. If your intermediate goals involve going back to school, you’re going to need to save to pay for the schooling, as well as make up for the lost income if you need to go to school full-time. If one of your intermediary goals is to become a Certified Financial Planner, you may need to take some additional classes and start studying.

If you’ve been following along, you’ve also determined your destination, your stops, and the overall route to get there. Now comes the tricky part. We have to make sure that the gas tank stays full, we stay caffeinated, and we take the correct exits.

In terms of our personal finances, this equates to making decisions in our daily lives that help us to achieve our long term goals. This is not about micromanaging against a budget, which we know everyone hates to do.  It’s about being thoughtful and methodical about your money — putting money against the simple goals you want in life. At the same time, most of us don’t have the ability to make the “correct” decision every time. But that’s what makes life fun and exciting. There will be times when we take the wrong exit, but the key to getting to our destination will be ensuring that we realize our mistakes and reroute to get to where we need to go.

Guest post written by Will of Hacking The Bank, a blog where he chronicles his personal finance journey and the stuff he learns along the way.