How to Create a Personal Financial Plan for the Year?

Working in the banking sector, I see the same thing happen every year: in January, thousands of people make a sincere promise to themselves: “This year, I’ll finally start saving money, build an emergency fund and finally save up for a major purchase.” But then spring arrives, unexpected expenses come up, and good intentions disappear into a stream of everyday small purchases.

Why does this happen? Even with a sufficient level of income, it can be difficult to save consistently and control spending without a clear plan. At the same time, without a clear roadmap for managing your money, keeping your budget under control can be challenging. Today, I’ll share a practical method that will help you organise your finances, learn to manage your money without strict restrictions and turn abstract dreams into specific, achievable goals.

Many people mistakenly believe that developing a financial strategy is a complicated process intended only for large corporations or people with millions in assets. I personally believe the opposite: the lower your current income, the more important it is to have a clear understanding of where every hryvnia goes.

A financial plan is your personal step-by-step roadmap from your current financial situation to your desired financial goals over the next 12 months. It answers three key questions: how much you earn, exactly where your money goes and how long it will take to achieve a specific goal.

When you operate without a clear strategy, money is usually saved on a leftover basis — you put away only what happens to remain at the end of the month. As a result, there is often nothing left to save by the end of the month. Having a structured plan changes this approach: you define your priorities in advance and turn saving into a regular habit that does not cause stress or make you feel completely restricted.

Any financial plan loses its meaning if you do not have a clear understanding of what you are saving for. An abstract desire to “get rich” or “have more savings” does not work because the brain does not perceive vague targets as a clear call to action.

I always recommend setting goals using the classic SMART approach: they should be Specific, Measurable, Achievable, Realistic and Time-bound.

To get a clear picture, divide your goals into three main categories based on how long they will take to achieve:

1. Short-term (up to 1 year). These are specific goals for the coming months: a seaside holiday costing UAH 60,000, a new smartphone costing UAH 35,000 or replacing household appliances.
2. Medium-term (1 to 3 years). These include larger projects: renovating your apartment for UAH 200,000, replacing your car or building a deposit for a mortgage.
3. Long-term (3 years or more). These are strategic goals: building capital to pay for your child’s higher education at a prestigious university or creating your own retirement savings.

A well-defined financial goal should have a specific cost and a desired deadline. For example, instead of writing “I want to save for a trip”, write: “I need to save UAH 60,000 by 1 August for a two-week holiday.” It immediately becomes clear that if there are six months left before the trip, you need to save UAH 10,000 every month.

Before planning your route, you need to understand where you are starting from. Begin by analysing your income and expenses for at least the last 1–3 months.

Start with a detailed list of all your income sources:

• your main salary;
• freelance or additional income;
• passive income (deposit interest, cashback, dividends);
• social benefits or regular financial gifts.

Then move on to your expenses. For convenience, I recommend dividing them into two key categories:

1. Fixed (mandatory) expenses. These are expenses you have to pay every month and that remain relatively stable: rent, utility bills, kindergarten or school fees, scheduled loan repayments and subscriptions for essential services.
2. Variable expenses. These are flexible expenses that you can directly control: groceries, entertainment, clothing, cafés and restaurants, household purchases and taxis.

Once you complete this audit, you may be surprised to discover that a significant amount of money is quietly disappearing on small purchases that do not provide any long-term value. Analysing variable expenses often helps identify areas where you can cut back without reducing essential spending.

If you manage your finances jointly with a partner, make sure your family budget is transparent and discussed together. Agreeing on priorities helps prevent misunderstandings and allows you to reach shared goals much faster.

Once your goals are defined and your income and expenses have been calculated, it is time to build your own financial system.

Subtract your mandatory expenses from your total income. The amount left can be allocated between variable expenses, savings and financial goals. This figure represents the amount you have available to cover flexible expenses and build your savings.

Before allocating money towards major purchases or long-term investments, it is worth creating a financial safety net. This is your emergency reserve for unexpected situations such as losing your job, illness or urgent repairs. A good benchmark for an emergency fund is 3–6 months of your basic living expenses. This money should be kept in a highly liquid and secure form so that you can access it whenever you need it.

As a simple guideline, I recommend trying the 50/30/20 rule:

• 50% of your income goes towards basic and essential needs;
• 30% is allocated to personal wants, leisure, entertainment and hobbies;
• 20% is immediately put towards building your emergency fund and achieving your financial goals.

Do not rely on willpower — human psychology is such that we will always find something to spend our spare money on. Set up an automatic transfer of 10–20% of every income payment to a separate savings account on the day you receive your salary.

Record your calculations in a format that is convenient for you: a simple Excel spreadsheet, a dedicated mobile app or a paper notebook. The key is to keep your personal budget visible so that you can easily spot any deviations from your plan.

To make the theory as clear as possible, let’s look at a practical example based on the 50/30/20 rule.

Assume your total monthly income is UAH 40,000.

Monthly income allocation:

• Basic essential expenses (50%): 40,000 × 0.5 = UAH 20,000. (This includes rent, utilities, basic groceries and transport.)
• Personal expenses and entertainment (30%): 40,000 × 0.3 = UAH 12,000. (Cafés, gym, clothing, hobbies and meeting friends.)
• Savings and financial goals (20%): 40,000 × 0.2 = UAH 8,000.

Calculating the time needed to build an emergency fund:

Your basic monthly expenses are UAH 20,000. The minimum three-month emergency fund would therefore be:

20,000 × 3 = UAH 60,000.

If you save UAH 8,000 every month, it will take:

60,000 / 8,000 = 7.5 months

to build the full emergency reserve.

Planning a financial goal:

If your emergency fund is already in place and your next financial goal is to save UAH 48,000 for a holiday within six months, the required monthly contribution would be:

48,000 / 6 = UAH 8,000.

Since this amount is exactly equal to your monthly 20% savings allocation, the goal is completely realistic and achievable without disrupting your spending balance.

Over the years, I have seen many situations where people abandoned their financial plans after just a month or two. Most often, this happens because of predictable mistakes that are easy to avoid:

1. Excessive cost-cutting. If you restrict yourself from all the small pleasures from day one — coffee with friends, going to the cinema or your favourite hobbies — your brain will quickly perceive the new system as a punishment. In this case, giving up is only a matter of time. Leave some room in your budget for “little pleasures”.
2. Ignoring small expenses. Subscriptions to services you no longer use, daily fast food or impulse purchases may seem insignificant individually, but together they can have a noticeable impact on your monthly budget.
3. Lack of flexibility. Life is unpredictable. If your income changes or new priorities arise, adjusting your calculations is perfectly normal. Financial planning is not a fixed document but a flexible tool that should adapt to your reality.
4. Saving “for later” without a specific deadline. When you save money without a clearly defined goal, you are more likely to spend it when an emotional impulse comes along.

You can manage your finances manually in a notebook, but digital tools make it much easier to monitor your income and expenses on a daily basis. Today’s banking sector offers a wide range of digital solutions that make financial management simple, transparent and almost effortless as part of your daily routine.

Here is a basic set of tools that I personally use and recommend to everyone:

• Mobile banking. For effective day-to-day expense management, it is important to have a convenient tool at hand. The Unex Bank mobile app allows you to set limits and monitor your finances in real time in just a few clicks.
• Cards with attractive terms. Use payment cards for everyday purchases. Some card products may offer cashback or other benefits that can help optimise your everyday spending. Terms and fees depend on the specific tariff plan, so make sure to check them before using the card.
• Reliable deposit products. Keeping your emergency savings in cash only means you miss out on the opportunity to earn income on those funds and may gradually lose purchasing power due to inflation. To preserve and grow your savings, consider hryvnia and foreign-currency deposits. Part of your savings that you do not need for everyday expenses can be placed in a savings account or deposit. This allows you to earn income while reducing the temptation to spend the money unnecessarily.

A well-designed annual strategy is much more than numbers in a spreadsheet or charts in an app. Above all, it gives you peace of mind and confidence about the future.

When you have a clear action plan, you stop feeling anxious whenever another bill arrives or an unexpected expense comes up. You know that your emergency fund will protect you from unforeseen circumstances, while regular contributions bring you step by step closer to the purchase you want or the trip you have been dreaming about.

Do not put off creating your personal financial plan until next Monday or the beginning of a new month. Take the first step today!

Translation into English was created with the help of artificial intelligence.