When planning your financial future, you should consider how much you should be saving, how to protect your credit, and how to set obtainable goals.

The money you earn, spend and save each month can be used for a variety of purposes, and financial planning helps you allocate these funds the right way. Conventional wisdom suggests you save money for long-term goals like retirement and homeownership, short-term emergencies and that you spend what you have left wisely. Every situation is different, and your options will vary based on a number of factors, including your current age, the age you’d like to retire and how much money you have coming in – and going out – each year.

How Much Should I Be Saving?

The conventional rule of thumb is to save a minimum of 10% of your income – but this is a guideline only. Depending on what stage of life you are in, how old you are and how much of a nest egg you have, this figure may need to change dramatically. Tailor the amount you save each month or each year to your actual goals, and to your options based on your income and what your employer offers. Maxing out your 401K makes great financial sense if your employer matches your investment, even if the amount you end up investing overall is higher than 10%.

Protecting Your Credit

Your credit and FICO score may not be something you think about when you work on your financial plan, but these statistics and figures can have a huge impact on your options. A high credit score allows you to save money on everything from your vehicle to insurance, leaving more money left over for investing. A low score leads to high interest rates and penalties and can lock you out of potentially lucrative investments like homeownership as well. Protecting your credit is an essential part of financial planning, even though is often overlooked by the conventional approach.

Goals Are Essential

Knowing what you want to achieve will help you outline the right plan to actually get there. Do you want to retire on time – or early? Are your kids approaching college age and dreaming of an expensive, private university? Do you want to invest in a home or be able to travel? Knowing what you want to do with your most powerful asset – your income – helps you figure out how to best allocate the money you have coming in. Once you have specific goals in mind, coming up with a targeted financial plan to achieve them is much simpler and will help you decide if conventional financial rules of thumb really work for you.