Establishing good financial health is probably a high priority for you, but finding the time to learn what you need to know and take action can be difficult. This lack of time coupled with the seemingly complex subject matter of personal finances can make financial planning feel overwhelming. This section is designed to give you the foundation you need to take control of your financial life.

Build Your Credit

A good credit rating is key to many financial decisions. Learning how to establish and maintain good credit is crucial to fulfilling your financial goals. Your credit can determine what kind of car you drive, what neighborhood you live in, and in some cases, whether or not you get the job you want. With so much riding on your ability to manage debt and pay bills on time, it's important to learn as much as possible about how to establish and maintain good credit.

How to Establish Credit

There are several ways to establish your credit. Here are some approaches that could help get you started:

• Put your apartment and utilities in your own name. This will establish a regular payment history under your own name and social security number.
• Apply for credit with a local business. Department stores and oil companies often have lower criteria for giving credit.
• Apply for a secured credit card. Available at local banks, your credit limit is equal to the amount you deposit into an account. If you deposit $500, then your credit limit is $500.
• Report credit history information. Make sure all of your creditors or lenders report your information to one of the large credit bureaus so you can build your credit history.

Maintain a Good Credit Rating

Maintaining a good credit rating isn't difficult but it's important and should be taken seriously. Since credit information will follow you for seven years, make it positive so it won't negatively impact your future credit needs.

• Pay your bills on time. This is the best way to keep a strong credit rating and be considered a good credit risk by your future lenders.
• Talk to your creditors. You should always contact your creditor immediately if you fall behind in your payments. Most are willing to set up alternative payment options, especially if you inform them right away of your situation.
• Review your credit report. It's best to review your report annually -- that way you can catch and correct any errors or negative information right away. You can also order a report combining information from all three major credit agencies:
• Experian: www.experian.com or 887-397-3742
• Equifax: www.equifax.com or 800-997-2493
• Trans Union Corporation: www.transunion.com or 800-888-4213

Saving for the Unexpected

We are often faced with unplanned expenses. Creating an emergency cash reserve protects you from life's expensive surprises. What if your car transmission goes out, your home computer crashes or your washing machine is on its last leg? These unexpected scenarios require immediate cash. Roofs leak and people get laid off--it always seems that something expensive is sure to happen when you least expect it. That's why you need to be prepared by building an emergency cash reserve. Saving for the unexpected protects and prepares you for life's expensive surprises.

How Much is Enough?

Saving the proper amount will vary depending on your individual circumstances, but as a rule of thumb anywhere between two to six months of expense money should be sufficient to create an adequate cushion for emergencies. But everyone has a different financial comfort level and the amount you should keep in reserves depends on two things: your monthly expenses and the stability of your income.

� Monthly expenses. How much do you and your family need to function comfortably each month? This figure should include not only your fixed expenses--such as your mortgage and car payments--but also your variable expenses--such as phone, utilities, food, etc. Once you've determined your monthly spending, you need to decide how many months of expenses you need to set aside in your reserve.

� Job stability. People with secure jobs, or families with double incomes, may not need to put more than two-three times their monthly expenses into an emergency fund. However, if you are single with inconsistent income or work in an extremely specialized field, you may want to save more than six months of expenses. The point is to put enough away to get you through rough times.

Where Do You Put It?

It's smart to choose safe, short-term, and liquid investments for your emergency fund. Checking, savings and money market accounts are good options. However, some investments--such as U.S. Treasury bills or CDs--may provide higher returns but sometime come with restrictions for taking your money out early. You can wait until their maturity dates to pay off unexpected bills or you can cash them in before they mature, though you may lose some interest and be charged a penalty.

Once you decide the best vehicle for your reserve, leave it alone! You should never use the funds unless you have an emergency. The goal is to keep your reserve fully-funded at all times so when the unexpected happens, you are fully prepared with enough money to get you through it.

Managing Daily Finances

There are many ways to turn daily financial organization from a time-consuming management headache into a more streamlined, and even pleasant, process. Here are some ideas to help you get started:

• Consolidate your accounts. Balancing brokerage and IRA statements with savings and checking account details can mean a pile of paper that seems insurmountable. Putting all your nest eggs in one basket can significantly reduce the hassle of managing multiple accounts from different banks and brokers.
• Use online banking. Need to check your balance from work? Want to make a quick transfer between accounts but don't have time to stop at the bank or ATM? Online banking allows you to manage banking and investments from anywhere, anytime. You can also review recent ATM and debit card transactions instantly to see if you need to be thriftier with your plastic cash.
• Pay bills electronically. Through online banking, you can make credit card, utility, and mortgage payments--even some landlords will accept rent electronically. Recurring payments can be scheduled for automatic deduction from your account, making late fees a distant memory. And the money you save on postage can really add up over the course of a year.
• Request a change in billing cycles. If your major bills come due at different times, you can request a change in the billing cycles. This will enable you to set aside a time each month to review and pay your bills.

Keep on Track

After factoring in all sources of income and accounting for large and small expenses, construct a budget you can live with. Being able to easily review your financial picture will put you in control and controlling expenses is the key to staying within a budget.

Take Control of Your Money

It's not what you make but what you do with your money that matters. By cutting out a few minor expenses, you can make a big difference in your savings. It's the end of the month and you've just finished paying your bills--rent, insurance, credit cards, utilities, car payment, etc. And after everything is paid and your checkbook is balanced, you see once again that there isn't enough left over to put into savings. It's just too hard to find any extra money to save, so your savings plan will just have to wait another month.

Sound familiar? For many of us it does. But contrary to popular opinion, financial security can be based on a very modest income and saving money can be much easier than you think. What it comes down to is knowing how you spend and learning how to spend less than you earn.

Little Things Add Up

Many of your large monthly expenses are probably fixed, such as your rent/mortgage, car or student loan payments. But it's the variable expense category that can easily get out of control. It's so easy to pick up a daily coffee and bagel, magazine, or a new DVD because individually they don't cost much.

But if you pick up a coffee and bagel every day for $3.00, over the course of a year that $3.00 could grow to almost $90 monthly and $1,100 annually. The little things can really add up and cost more than you realize.

Everyone Can Afford to Save Money

Finding money to save is easier than you think. If you decided to make your own coffee and bagel in the morning, you could save that $3.00 a day and put $90 dollars into your 401(k) or IRA account monthly. The sooner you start, the faster it all adds up.

Control Your Money

Of course, no one is recommending that you eliminate every indulgence, because some of these small expenses enhance your enjoyment of life. But everyone has some purchases they could reduce to help reach their financial goals. Here are some ideas that can help you control your money:

• Write down each expense. Try it for a week and keep a record of absolutely everything you spend. You'll begin to see how the little things add up.
• Only pay cash. It's a lot harder to hand over cash than it is to use plastic. This helps cut down on impulsive purchases.
• Wait a day before buying anything over $100. If you really want it, then you'll go back to the store and buy it. But there'll be times when you decide not to make the purchase and you'll save yourself $100 or more.