How to map out your financial plan for this year

If you are hoping to start out the new year on a good foot financially, a solid first step is making a financial plan. While you may already have some pieces in place, the end of one year and the beginning of another is a smart time to review where things stand and take into consideration what is on the horizon.

An annual financial plan "takes a snapshot of the state of your personal finances," balancing "your assets against your liabilities while considering your financial goals and what you may need to do to realize them," said Investopedia. That way, you can make sure you are on the way to meeting your financial goals both short-term and long-term, whether that entails course-correcting from last year or continuing on the same path with some minor adjustments.

1. Take inventory of last year

Before you look forward to the year ahead, it is important to look backwards. By taking an annual financial inventory, you will get "a snapshot of your financial status, which makes it easy for you to compare your progress from any given year," said SmartAsset.

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To do this, you will want to check in on the following and note where they stand, making any adjustments as needed:

• Your income and expenditures
• Your assets, including savings, retirement accounts and investments
• Your debts, such as student loan debt, credit card balances, your mortgage or car loans
• Your credit score, credit report and credit utilization ratio (how much of your available credit you are currently using)

2. Determine your goals for this year

Once you have a full picture of your financial situation as is, you can start to narrow down what your financial priorities are for this year. Stumped on where to start? "Think about what you ultimately want to do with your money — do you want to pay off debt? What about buying a rental property? Or are you aiming to retire before 60?" said Credit Karma.

You can broaden your aspirations beyond what is just achievable in a year, too — after all, you have to start somewhere on those bigger goals. It can be helpful to divide your goals "into short-term, midterm and long-term goals," said Investopedia, so you have a general timeline.

From there, work to make your goals — some of which may feel kind of intangible — into more concrete steps. This process is known as setting "SMART financial goals (specific, measurable, achievable, relevant and time-bound)," which essentially "help you break down your financial plan into actionable pieces," said Credit Karma.

For instance, if your goal is to retire early, evaluate what you can do this year to work toward making that plan a reality, such as upping your monthly 401(k) contributions or shifting your investment portfolio's asset allocation. On the other hand, if your goal is to eliminate high-interest debt, you might reevaluate your expenditures and look into debt paydown solutions like a balance-transfer credit card.

3. Make adjustments for what is ahead

As you consider your financial goals and aspirations, it is also important to take into account any impending changes to your life. Is this the year you are having a baby? Are you planning to quit your job? Do you expect a big promotion? All of these factors, among many others, can shift what your financial roadmap for the year looks like.

With all these realities factored into the equation, you may realize some adjustments are necessary. Some particularly important areas to think about adjusting include your investment portfolio, your insurance coverage, your emergency savings, your estate plan and your savings and spending habits, among others. After all, "a financial plan isn't a static document — it's a tool to track your progress and one you should adjust as your life evolves," said NerdWallet.