Sit down with a cup of tea and think about what it is that you want in life. Do you want to send your children to Harvard? Retire at 45? Travel the world? Open your own business? Write down all of the ideas that pop into your mind, once you have these ideas down, prioritize them from the most important to the least important.

At the end of the month do you find yourself wondering where all your money went? For a month track every penny you spend (even the $1.00 you spend getting a drink from the soda machine) in a spending diary. At the end of the month sort what you spent into topics like dining out, groceries, clothing, grooming, etc.

Review your spending diary and the amount of money you have coming in each month. Does your spending align with your priorities and values? Create a workable monthly budget that reflects your priorities and values. Your expenses should be less than your income.

Many people find themselves surrounded by debt whether it is school loans, credit cards or home mortgages. Being debt free is a liberating feeling. To get out of debt start paying off your highest interest loans first.

The best rule of thumb in preparing for retirement is to save 10-20% of your income. Start saving early so that your money can accumulate and grow for many, many years. There is a lot of flexibility in saving for retirement including many different types of tax advantaged accounts.

Look into any retirement plans that you are eligible to participate in through your employer. Some employers will match your contributions up to a certain limit; if your employer does you should try to at least contribute enough money to get the maximum employer match. This is free money.

When it comes to investing your retirement savings you should look at your time horizon. If you have a long time until retirement then it is better to use a more aggressive investment strategy and if you are nearing retirement a more conservative strategy is wise.

Insurance is a very important piece of your financial puzzle; if you don't have insurance you could loose everything. Make sure you have adequate homeowners, automobile and health insurance.

Determine if you need life, disability or umbrella insurance. Life insurance is appropriate for individuals who have others dependent on their income or for those who feel more secure having life insurance coverage. Disability insurance helps supplement your income if you get disabled and are not able to perform your job. Umbrella insurance offers liability protection on top of your other insurance policies. For example, if someone injures themselves while on your property and sues you for a large sum of money then your umbrella policy would kick in after your homeowner's policy is maximized. Liability suits typically start at $1 million. Umbrella insurance is inexpensive and can save you from financial disaster.