Talking about money is intimidating, especially when you have to come eye-to-eye with your own bank account. Plus, when has anyone's excitement level peaked thinking about IRA, 401K, or rainy day funds? Well, when some of your life goals include big dreams like buying a house, owning property, or preparing for a family, financial planning is key to making sure you're never stuck without a backup.

What is a financial plan?

It's a blueprint of where you're at and where you want be in and through retirement. Matthew Murawski, a financial planner for Goodstein Wealth Management, says you can start your plan at any age, but the sooner the better. "It's hard to reach your goal if you don't know what your goal is. Once we figure out what we're trying to hit, we can reverse engineer the plan."

A successful plan requires you to establish several key components.

1. Financial Position or Goal Setting

This is where you take a deep breath and establish your current financial situation. How much money do you have in your bank account? How much money is coming in every month? How much money is going out every month? What are you spending the most on? Where could you cut subscriptions or services?

Once you establish the basics, then make a list of goals. Make them extremely specific and allow them to range from simple achievable ones to more complex reach ones. For example, avoid goals like "save more money" and try "budget $450 on food per month". Start by setting five short-term and long-term goals.

2. Risk Management

You never know what to expect in this crazy thing we call life. Car accidents, health-related issues, or things-that-shall-not-be-named can strike in an instant and you'll need to have cash on hand, especially if you're put out of work. This is also a good place to plan for possible disability, life, and miscellaneous insurance needs. Murawski recommends setting up an emergency fund.

"If you're single, plan for 3-6 months of savings. If you have kids, aim for 6-12 months." Look back at your financial positioning to see how much money you typically spend a month to establish your emergency fund number. If you're seeking insurance advice, be sure to talk to someone who knows about the industry, not someone selling products within in.

3. Wealth Accumulation

This is the point where you can really start to prepare for your future. Technically, it begins once you enter the workforce and ends when you retire. Murawski notes that this is a good time to decide which accounts you want to invest in, including 401K, Roth IRA, Traditional IRA, Simple IRA, SEP IRA, Defined Benefit Plan, and after tax accounts.

4. Tax Planning

With wealth accumulation comes taxes. Adding this portion into your financial plan can help you understand and save for those tax consequences that naturally come with your larger investments.

5. Retirement Planning

When do you hope to retire? What would you like to be doing in retirement? How much money do you want in your retirement account? What are ways you can start setting aside money here? Thinking about these tough futuristic questions can really help you plan properly.

6. Estate Planning

Not everyone needs this one right away, but this is here if you ever want to own property, land, or more dream homes.

Okay, this seems intense. Where do I start?

Murawski recommends starting by writing down what you do know so far in terms of financials is an easy first step. From there, lay out some goals. He simplifies this process: "Having goals is like laying railroad tracks to where you're going instead of wandering aimlessly. Lofty goals, small ones - have them all. The big thing is to just write it down."

Any other tips?

If you're a numbers oriented person and need something to work towards, Murawski recommends putting away at least 10% of your income towards your specified goals. He admits it's a scary number to look at initially, so if you're just starting out, set this aside and come back to it later. In addition, ask yourself this: What number in your bank account would help you sleep at night?

A huge pitfall of financial planning is starting out strong and then falling off the bandwagon as time goes on. Having a coach helps you keep you on track but know that you can always start small on your own and tap into professional help when you're ready to tackle those goals.