First, you have to figure out what you own and what its value is. 
What exactly is included in the category of 'things you own'? 
For starters, it’s the money you have, either in cash or in deposit/savings accounts. 
Investments in financial securities should be counted as well. 
If you know the present value of any future retirement payments you will receive, include that too (but don’t sweat it if you don’t really know about it, just skip it). 
In case you own real estate, you should include that too. 
It is easiest to use a spreadsheet to write down your assets - you can use this one as a starting point.

Liabilities are more straightforward.
A mortgage is the largest liability for most households. Other forms of debt are student loans, consumer loans, and credit card debt.
Remember, you should write down the remaining amount of principle to be repaid for all the debts you have.

In this step you write down how much you earn each month after tax.
If you have a stable salary, that should be straightforward.
If your job is flexible or the remuneration is variable, simply fill in your best guess(timate).

Keeping track of expenses can be a bit tricky, because they vary from month to month, and it can be cumbersome to aggregate all small expenses you make.
The key is not necessarily to write down a precise monthly spending amount, but rather a ballpark estimate. If you make a big purchase that you do once per year, for instance, you can divide it by 12, and thus record an averaged monthly spending amount.
There are many budgeting apps which help you track expenses, but you will get a better grasp of your expenditures if you list them yourself using a spreadsheet.
If you don’t want to track expenses directly, a trick I sometimes use is to calculate my expenses as the difference between my income and the change in my net wealth every month.

An emergency fund is an amount of money set aside for unexpected expenses such as job loss, sickness, having to pay for something which is not insured, etc.
This fund gives you a peace of mind that you are prepared for whatever life may throw at you. Which is obviously a good thing! 
If you don’t already have any saved up money, then aim to as quickly as possible put USD 1000 (or the equivalent to that in your local currency) in your emergency fund.

We humans have a psychological tendency to emotionally suffer more from losses than we enjoy wins. Hence, it is a good idea to protect yourself on the downside, even if that means paying a small premium.
Depending on the country where you live and work, you may be entitled to different social benefits, health insurances, unemployment allowances, etc. At the very least, you should take out the following:
- Health insurance
- Travel insurance (when travelling abroad)
- Property (theft) insurance
- Insurance against damages that you may cause to others (liability insurance)
- Life insurance (if you have a family or other dependents)

Not all debt is created equal - if you take out debt to help you earn more money in the future, such as borrowing money for college tuition or to finance your side hustle (or arguably even to buy a house, although it is not so clear-cut), this is generally a good thing.
Borrowing money, especially on a high-cost credit card, to finance consumption such as going on a vacation or buying expensive fashion items, is not something I would recommend (I realize that may be an unpopular suggestion, but it is one I truly believe to be a good one).
Thus, you should almost always avoid credit card debt, and any associated late fees and high interest rate charges.
Having no or little debt brings a sense of freedom and well-being, and that is why becoming debt-free is often the lowest-hanging fruit in personal finance management. Aim to pay off debt sooner rather than later!

After you pay down your debts, the next smart thing to do is to build up the emergency fund you started in step 4.1.
As a rule of thumb, the size of your emergency fund should be equal to 6 months worth of living expenses so aim for that.

If you have dependents, it is a good idea to make a plan for what happens in the unthinkably unfortunate situation that you pass away.
This is not a pleasant topic to think about, but it is necessary to do it if you care about your family.
An estate plan involves setting up a revocable living trust, last will and testament, medical directives, and a general durable power of attorney.

Major future expenditures are related to (financial) goals, such as:
- College education
- Marriage
- Buying a house
- Renovating your home
- Having kids
- Retirement
- Starting a business
You likely already have some of these goals in mind. By thinking about them and writing them down you are more likely to achieve them so try doing that 😉.

For each of your goals from Step 1, you need to pick a date when the expense will be due, and an amount that you will have to pay.
For some of the goals, such as marriage, it is easier to say when you are going to do it (spring next year maybe? 👰) and how much it will cost (even though it will probably cost more than you budgeted for it 😉). For others, such as retirement, things can get more complicated.
Retirement is often far away in the future, which makes it less tangible. Also, right now you really don’t know how you will want to spend your days in retirement. Will you want to retire next to the beach in a warm foreign country? Or will you want to continue living in the house and place where you have always lived, close to your children and friends?
You don’t know, true, but your educated guess right now is the best you can do, so do a bit of thinking and research, and try to come up with guesstimates for retirement date and amount. The mere fact you are thinking about your retirement means you are on your way to handling this part of your life!

Your net wealth is equal to the value of your assets minus the value your liabilities. You determined these in step 1, so you should be able to easily calculate your net wealth now.
Your net wealth might be negative, which means the values of your liabilities is more than the value of your assets. In that case, I wouldn’t think about starting investing just yet, but I would pay off my debts first.

As a rule of thumb, you should aim to have 6 months worth of expenses in your emergency fund.
If you don’t have that amount yet, you should build up your fund to that amount, and only then consider investing.

If you have extra savings on top of what you have already earmarked for your emergency fund, you can start to think about investing.
You don’t necessarily have to invest your savings - you can keep them in your bank account.
The problem is, your bank account's interest is close to 0% nowadays and you probably want to earn a higher return on your money.
Obviously, if your net wealth is on average growing over time, rather than losing value due to inflation when in the bank, you will be able to spend more in the future and set higher financial goals.

The first thing to do is to learn about the typical investment strategies available to you as a retail investor. The goal is to pick one or more of these to manage your money.
Popular strategies are passive buy-and-hold, core and satellite, stock picking, momentum, factor investing, active fund selection, risk-parity, and many others.
In each strategy you should evaluate at least the following:
1. Fundamental merit of the strategy
2. Costs such as your time involvement, broker fees, and others
3. Risk-return characteristics

Regardless of which strategy you choose, you should think about your own risk tolerance, that is, how much losses from your investments you can tolerate.
Since taking more risk typically implies higher future returns, you may wish to invest in a riskier way.
A useful way to break down your total risk tolerance is into willingness to take risk and ability to take risk.
Your willingness to take risk concerns your personality - how risk-averse or risk-seeking you are psychologically and how likely you are to stay on course with a predetermined strategy.
Your ability to take risk measures how risky you can invest without comprising your ability to reach your financial goals.

The timing and amount of your future major financial goals are crucial when deciding how to invest.
As an example, if you have a decent amount of money in bank deposits, but a big expense is coming up, you probably shouldn’t invest a lot of that money in a risky way, because you don’t want to take a chance losing it and being unable to pay for your big expense.
On the other hand, if you are investing for your retirement, which is 30 years away, you have a lot of time to make up for potential losses, and you could invest in a very risky way, which should give you more money in retirement.

You should also consider the overall tax implications of your financial plan and possibly tweak it to optimize your tax bill. It could be that one investment strategy looks superior on its own, but after accounting for your unique tax situation, another strategy might be preferable.
Take into account any legal and compliance restrictions you may have. For instance, if you are employed by a financial institution, you may be imposed strict rules on how you can invest.
Also, consider your human capital, which is defined as the present value of your future earnings. This is an intangible asset that is not included in your personal financial statement but is a factor that influences how risky you could invest.

Picking an investment strategy is an iterative process, meaning you may have to tweak your financial goals, your investment strategy or risk target several times until you are happy with your financial plan.
It may turn out that some of your initial goals are hard to reach and you might have to change them. For instance, you might be difficult to return as early as you want or perhaps buying such an expensive house reduced your assets too much and makes reaching futures goals difficult.