There is a GREAT Calculator on Suze Orman's website (BTW, we don't get CNBC anymore, because we are cheap and got rid of our extra channels, but you can get her show -and many others from their site for FREE on itunes and watch it on your computer, or my case iPhone) that tracks ALL your spending - even averaging what you spend on vacations, insurance, gifts, etc. each year to what you are actually spending on it each month. It think it is a very useful tool to see where you can cut spending, where you are spending too much, and just to see where all your money is going... I did it for us and found it useful to see how the money is spent every month. It is important to know where all your money is being spent and be HONEST with yourselves, so you can be as accurate as possible.
The calculator will show you if you are overspending or underspending each month and try to show you how you can live within your means. Which, if you are overspending each month, you really need to get honest and figure out how you can live within your means each month and make a plan to achieve it.
Next, if you have debt, make an action plan on how you can eliminate it - I hope if you do have credit card/loan debt, that you do in fact already have a plan, but if you don't it is never too late to start one! Here is another calculator from Suze, to work on your credit card debt.
Once you have dealt with your spending and debt, decide how much you can dedicate to investing and savings - it doesn't have to be much, but you NEED to start - the younger the better! Most say you need to put 10% of your pay into retirement. Well, that would be ideal, you need to start somewhere, no matter how small.
Make a plan on how you are going to save/invest this money. Are you going to do a simple savings account? Are you going to open a ROTH IRA? Decide what is best for your situation. Open a savings or investing account.. Look for incentives to opening an account - many companies will give you money to start an account. Sharebulder will give you $50 for opening an account and if you only have $20 a month to invest, that is over 2 months of extra savings for you. Decide what company will serve your needs best and set up an automatic savings/investing option to have that money taken out every month.
Once you have a complete spending/debt/savings/
If you are local - and I know you well- I would be more than happy to help you set up a plan and go through your finances with you (for free of course - but I would take homemade chocolate chip cookies). I honestly love this stuff and want everyone to succeed and have a plan :)
Next week's topics include: ETF, Limit Orders, 529 college savings, and more.. Let me know what you would like to know more about or what topics you would like to see!