Like it or not, we all need to plan for the future. But it’s really hard to know just where to start.

That’s why the first of the six steps is to take control of your finances – to sort out your current position, work out your priorities and think about making a plan for the future.

Balancing our finances

The key things that affect our finances are what we earn, what we owe, what we’re spending and how much we’re saving.

It’s the balance between these elements that determines just how healthy our position is. Over time, we should be looking to earn more, to reduce our debt, to control our spending and, finally, to increase our savings.

To get a quick idea of your position, you could try taking the financial healthcheck from Aviva. And then, before you can focus on saving for the future, you'll have to tackle those two everyday elements: spending and debt.

Tackling your spending

You can't have financial control without managing your cashflow -what's going in and out of your account.

Start by asking yourself some questions: how much money do you have coming in and where does it go each month?

To keep track of your spending, you could try noting down absolutely everything you spend in a diary for a month - you might be surprised.

Once it's all written down, you should have a clear overview of how much you have to spend on fixed costs (eg commuting, rent/mortgage) and what spending you should be prioritising (eg credit card and loan payments). And if you find that you're regularly spending more than's coming in, you can identify where you can make savings.

Feeling overwhelmed?

Start by reading the six steps - it will be a lot easier than you think.

Setting goals

Goal setting is an essential part of taking control of your finances. Once you have goals, you have direction - how else are you going to know what to aim for?

Of course, you need to plan how to achieve them too. More about that later.

The key thing about goals is that they should be specific and achievable. It's not much use to say, -I want to have lots of money' - obviously we'd all like that. Put a figure and a date on it, and it becomes something you can work towards.

Once you start thinking about what you want to achieve, you're going to find that you have a mixture of short-term and longer-term goals

Long-term goals are hard to get to grips with because they can seem so, well, long term. But when it comes down to it, we’re all going for pretty much the same thing: enough money to have the life we want when we retire.

Admittedly, this does feel a little abstract. It's up to you to make it less so. In fact, that should definitely be one of your short-term goals.

What you need to do is to establish a long-term investment target so that you'll have a picture of what your income could be when you retire. The retirement planner will help here - fill it in and take it to a financial adviser.

The sooner you get down to it the better. That's because delay is costly. The longer you put off saving for your long-term needs, the more you'll have to save.

Once you've got an idea of what you're aiming for, you can start developing a long-term investment plan - built around a pension, your home and savings - to get you there.

Short-term goals are rather easier to visualise – maybe you want to buy a new car, save up for a deposit on a house, build up some savings for a rainy day or pay off a loan. Although goals like these are short term when compared with planning for your retirement, they could still take you five years or so to achieve, so you need to plan for them too.

As you've probably realised, a potential problem here is that you might have quite a few short-term goals. This means you'll have to do some thinking about your priorities.

Don't be tempted to cut back on the long-term goal of saving for your retirement. Look at the short-term ones. Which are necessary and which ones would just be nice to have?

For instance, perhaps one of your short-term goals is to pay off your credit card debts. Credit card debt is expensive so this one should be a priority. (If you've got credit card debts and this isn't one of your short-term goals, put it on the list immediately!)

You should consider settling your debts before you think about saving for anything else as it's possible that you're paying more interest on your debts than you'd be receiving on your savings. You might be losing money.

Once you've taken steps to control your debt and spending, and worked out what you're aiming for, you're ready to start thinking about a plan to achieve your goals. In fact, another useful, though unshowy, short-term goal would be to talk to a financial adviser about this. But remember, nothing's set in stone. Don't forget to review your goals -and any plan you've made - if your situation changes.

Deposit

A deposit for a property could be one of your short-term savings goals. It's how much cash you've managed to get together towards the purchase price -you'll have to borrow the rest in the form of a mortgage.

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Loan

Money lent to you by, say, a bank. You'll have to repay it with interest.

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Interest

Credit cards, loans, and bank accounts will all quote you an interest rate. This rate is expressed as a percentage and refers to the money that will be added to your savings – or to your debts – each month or year. The extra money you receive or have to repay is called interest.

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