Putting off important tasks and saying you’ll do them another day is easy. We all do it, from waiting to wash laundry until there’s no clean underwear in sight to going to the grocery store only after the fridge is empty and you’ve ordered takeout three nights in a row.

One thing that shouldn’t be pushed off to a future date, however—no matter how much we might want to—is financial planning. That’s because when we delay organizing our finances, it causes us to postpone many other things, too.

An Insider and Morning Consult survey from 2019 showed that millennials were more likely to put off buying houses, making career moves, undergoing medical procedures, and even getting hitched—all because of cash-related reasons.

But it’s no surprise that millennials have trouble dealing with their finances. Besides all the external factors that have essentially set them up for failure (think the Great Recession and the COVID-19 pandemic), only 16% of millennials can be considered financially literate, according to George Washington University’s Global Financial Literacy Excellence Center.

Plus, an unsurprising majority of this age group feels stressed when thinking and talking about finances. Trust me: I get it. But running away from the stress of planning for your finances only causes that stress to pile up and keeps your financial situation something you’re not proud to talk to your parents or friends about.

And though not all millennials avoid dealing with their finances, they shouldn’t pat themselves on the back just yet. That’s because many save their cash aimlessly without any proactive financial planning. They don’t have a purpose for the money they’re saving, and they often splurge on stuff they don’t need (or want) rather than fund a life goal such as buying a house or saving up for retirement.

Fortunately, not all hope is lost if you’re wondering how to plan for financial success. The key is to start today. Don’t push it off with that tired refrain of, “It can wait until tomorrow.” Your future self would agree that it can’t wait. Here are four proactive financial planning steps you can take now to get things on the right track:

1. Set goals and start saving for them today.

Goal setting in financial planning is not about just saving your money for a rainy day. Setting concrete financial goals is essential to be more proactive with your planning.

Maybe you dream of attending drama school one day or purchasing recording equipment to help with your podcasting side gig (don’t we all?). Setting a goal and determining the dollar amount you need to save will help that dream become a tangible reality.

Your goals don’t have to be big and lofty. Think about the short and intermediate objectives you have in life, so your financial plan doesn’t feel too restrictive. For me, this is collecting limited-release sneakers. This goal is more expensive than I’d like to admit, so I plan for those purchases by saving for them monthly.

That brings us to how to set financial goals and achieve them. If you place your savings to automate monthly so that you put away small amounts of cash at regular intervals (without having to use any brainpower to get it done), then you remove the risk of human error and put yourself on a path toward success.

2. Create an emergency fund, but don’t abuse it.

If you’ve taken any personal finance course, you probably know about the importance of an emergency fund to your overall financial health. Despite that, 53% of millennials surveyed in the National Financial Capability Study didn’t have an emergency fund that could cover even three months of expenses. Having an emergency fund gives you a foundation to make financial decisions without feeling like you’re stepping off a cliff into the unknown.

It also offers peace of mind if something were to happen to prevent you from making money. Remember: No matter how invincible we think we are, it’s crucial to plan for these potential obstacles.

You’re probably wondering how much to save for this purpose. The recommended emergency fund amount to save for is three to five months of living expenses (rent, utilities, phone bills, and so forth) in some form of cash. It’s a good practice to put the fund in an online bank, which often has higher interest rates than traditional brick-and-mortar institutions.

Please don’t put the money in an investment account that would expose it to market volatility. Yes, that means not dumping all of your emergency funds into cryptocurrency investment platforms. This money is intended to be easily accessible when needed—not tied up in an account you can’t access for 20 years.

And though having a ton of money in your emergency fund can feel good, you don’t need to add to it indefinitely. Holding on to too much cash can be detrimental to your financial goals because the most beneficial thing you have as an investor is time. So only adjust your emergency fund if your monthly expenses increase, you get a raise, or you gain dependents.

3. Pay off your debts by interest rate.

If you’re dealing with multiple types of debt, such as credit card and student loan debt, it can be overwhelming to come up with a plan to pay them off while also saving for other lofty goals (like being able to retire before you’re 90).

The first step is to focus on the high-interest debt, aka anything that charges 6% to 8% in interest. This is because many financial decisions are based on opportunity cost, and you can’t guarantee you’ll have this kind of return on your money if you invest it elsewhere instead of paying off the debt.

Consider following the debt avalanche method to pay off your debt fast and save money. Start by listing your debts from the highest to the lowest interest rate. Then, pay the minimum amounts on all your debt, but put any extra payments toward the high-interest debt first on your list. As you start moving through the debt on your list, you’ll be able to engage in more proactive financial planning and add new goals to your regular savings plan.

4. Start a retirement plan.

You’re young, and retirement probably feels light-years away. So is now really the time to start planning for old age? 100%, yes. The benefits of early retirement planning far outweigh any reasons that might hold you back—even if that’s an unnecessarily flashy car with a high monthly payment or a fancy international vacation.

If your employer offers a 401(k) and matches your contributions, take advantage of that perk. It’s free money. If you can, max out your 401(k) to meet the employer match and experience significant tax benefits that no other investment account can offer. Your contributions can be taken directly from your paycheck, which decreases your taxable income and potentially puts you in a lower tax bracket. Even better, those pre-tax dollars are tax-deferred until you decide to withdraw them during retirement.

If your company doesn’t offer a 401(k) for whatever reason, you can open a Roth IRA on your own and max out your contributions—as long as you’re under the IRS income limit. In 2021, that limit was $140,000 for individuals and $208,000 for married people who file their taxes jointly. Whether you use a 401(k) or Roth IRA (or any other retirement account), the important thing is to start saving as soon as possible. Time is your greatest asset.

When you start proactive financial planning, you start programming your success. I speak from experience when I say that the peace of mind that comes with that is unmatched. No matter where you are in your financial journey, start planning today to gain confidence in your financial health in the near and distant future. Your future self will thank you.

Disclosure: This material has been prepared for informational purposes only and should not be used as investment, tax, legal, or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or security against a loss. You should consult your tax, legal, and accounting advisors.

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