We all have big financial decisions to make during our lives. Buying a house, making pension plans and looking after our families all require a more in-depth knowledge of our financial situation than everyday living tends to provide.

Whether your job brings in £20,000 a year or £200,000 a year, it's important to know where your money is going - both in the short term and in the long term. Everyone is different - we all have different needs and requirements, and recognising them is the first step towards a brighter financial future.

It's easy to get so caught up in the day to day bustle of life that you lose track of where your money is going. But when this results in not having the right financial products in place to look after both your current and future needs, you could be losing out in a big way.

But don't panic. The first step towards creating a better financial future is to educate yourself as to what your situation is at present. Knowing where your money is going now can help you to plug any financial drains on your income, as well as funnelling more cash into those areas that are in desperate need of attention.

Financial planning needn't be difficult. It's simply a process of highlighting your needs and accommodating them. You can take on the first few steps on your own; after that you may well benefit from enlisting the help of a financial adviser.

Start by writing down in full your net income each month - that's the amount you actually bring home. Make a note of any bonuses or commissions separately as these aren't guaranteed. Next, make a list of all your current outgoings. This will include mortgage payments, insurances, pension payments and all your other regular outgoings such as gas and electricity payments. You should also make a note of any outstanding debts you have in addition to your mortgage.

This exercise will help you to understand where your money is going - not to mention how much you tend to have left at the end of the month. It will also highlight how much money you have channelled into investments for your future. A financial adviser will be able to advise you on planning for the long term as well as your immediate needs.

Many people find it difficult to plan for the future. Retirement seems to be such a long way off that it isn't worth worrying about just yet. But as with most monetary investments, the sooner you start paying into them, the better the return you will eventually get.

So, if you want to be secure and free of financial worries for your whole life, the best time to start being pro-active with your finances is now.

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