Consider a financial plan a roadmap — or GPS, if you will — for your future. As Jennifer Myers, CFP and president of SageVest Wealth Management in McLean, Virginia, explains, the plan steers you “toward your future goals and your financial security as you plan for [various] life events.”

A financial plan is a comprehensive, multi-page document most often created with a financial adviser. He or she will look at all your financial details — your cash flow, investments, savings, debts, insurance, and more — then work with you to identify your financial goals, such as when you’d like to retire or how much you’ll need to save for a house down payment.

To make a financial plan, you’ll need to start by crunching the numbers to see clearly where you stand

To create your financial plan, look at your finances and see where you stand. Then, adjust your spending and saving to maximize the money you’re putting towards your goals.

For example, if you’d like to retire at 67 and need $50,000 a year after taxes to live, a financial planner will look at your current retirement savings, factor in average returns in your investment categories, consider inflation, etc., to see if you can retire at 67 as is, or if you’ll need to save more. From there, you’ll adjust your financial plan to get where you’re trying to go.

Similar forecasts and strategies can be made and identified for other financial goals — think: creating an emergency fund, saving for your kids’ college funds, or buying a vintage car.

A financial plan can also help you find ways to maximize your savings and take advantage of incentives like employer matches, as well as better understand your personal tax responsibility.

The big mistake we’re all making

A financial plan, in other words, provides vital direction for your future. However, financial experts agree that many Americans are making a critical mistake with their financial plans: They set it and forget it, never reevaluating if their plan still works for them.

“It’s common for most people to complete a financial plan and then not touch it for years,” says Brian Boyd, CFP and managing partner at Boyd Wealth Management in Sacramento, California.

There are many reasons most people set and forget their financial plans: they may not be eager to invest the time and money it takes to update it, or they let it slip to the bottom of their priority lists. Perhaps worse, some advisers may not encourage maintaining the plan, Myers explains.

However, ignorance is only bliss until the financial ramifications catch up to you.

A financial plan that isn’t updated regularly might not help you reach your goals, planners say. Wait too long to reevaluate it, says Nick Kolbenschlag, managing partner at Crown Wealth Group in Charlotte, North Carolina, and “it might be too late to make the needed changes to get and stay on track.”

For example, let’s say you set a course to save for your kid’s college education in your financial plan, which you created at their birth but didn’t update until they were filling out applications.

“There’s a good chance you’re going to miss the mark due to cost increases, market fluctuations, and under funding,” Kolbenschlag says.

Working with a financial adviser can help keep you on track to reach your goals. Use SmartAsset’s free tool to find a qualified professional near you »

The same goes for other investments, such as retirement funds and mutual funds meant to finance life goals. “Imagine running a plan with an investment return assumption of 8% per year, only to realize a return of 6%,” says Boyd. “The difference can translate into hundreds of thousands of dollars of underfunding in the plan.”

In fact, Boyd goes on to say, “This document is often worthless as time goes on because tax rates change with every administration, savings rates change with every career change and birth of a child, and investment return and inflation rates … change with every economic cycle.”

Financial planners say you should update your financial plan at least once a year

“Your financial plan may be the single most important plan you ever make,” says Zak Leedom, CFP at Libertas Wealth Management Group in Columbus, Ohio, “and so, it deserves your time and attention — not just once, but on an ongoing basis. It needs to be one that is accurate, but with the ability to adapt and evolve with the changes in your life.”

A once-a-year review “assures the client they are still on track to hit their goals and allows us to adapt to any changes,” he explains.

At a yearly review, you should work with your adviser to reconfirm your goals, as well as update your assets and liabilities, and “assess what changes should be made to the important underlying assumptions so the output can be meaningful,” Boyd says.

More specifically, Myers adds, “One of the easiest things to look at is if you saved as much as your plan projected. If the answer is no, then it’s time to figure out why.”

Want help setting up (and reviewing!) your financial plan? Use SmartAsset’s free tool to find a qualified financial adviser in your area »

It’s also important, she says, to review your last year’s earnings to see if they align with what you projected. “If you’re earning more than you expected, chances are that you need to be saving more as well,” she points out. (The reverse is also true, of course.)

You’ll also assess things such as whether your anticipated pension payout has changed, if your child received a scholarship that will defray their college costs, whether you’ve taken on new debts — and how much — or how a new job could affect your ability to invest, Leedom explains.

While most people can tackle these issues and more in a yearly review, financial planners say there are people who could benefit from updating their plans more frequently.

“Anyone going through a major transition should be reviewing their plan more frequently,” says Boyd. “These transitions include having children, a major career change, a major financial event such as the sale of a business or a company stock windfall, or loss of a spouse.”

They also include getting married, buying a house, or receiving an inheritance or any other form of financial windfall.

Those close to retirement may also benefit from more frequent evaluation of their plans, says Kolbenschlag, as will business owners, whose profits and losses may be in constant fluctuation.

“The reality of life is that it ebbs and flows, and so does your financial planning,” Myers points out. “Putting your plan on a shelf isn’t planning — it’s ignoring. If you don’t update your plan, how do you know if you’re succeeding or falling behind?”

Originally published on Business Insider.

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