Personal Finance - the Essentials

Personal finance advice can be found everywhere you turn these days. But most of the time we hear advice that is too generalized or too specific. Most of us just need a simple guide to a prosperous, healthy financial life. Keep reading to learn the 10 basic steps to financial security and success.

1. Spend less money than you make.

This first step is clear, simple, and pretty basic. You will never achieve financial success until you can understand and implement this step. If you are spending more money than you make, you are increasing you debt. There is no way you can achieve wealth if you are constantly headed into more debt. The best way to think about wealth is this:

Wealth = What comes in - What goes out

Having problems with this step? First, create a budget. There are numerous resources to help you do this, and eventually I will write an article to help you do this. But in the meantime, do a simple Google search for 'budget' or 'create a budget' and you'll find plenty of information.

2. Create a will, advance medical directive, and a power of attorney. If you have considerable assets or just want the flexibility, establish a revocable living trust as well.

All of these documents ensure you and your assets are protected and cared for according to your wishes. Everyone should have a will, advance medical directive (sometimes called a living will or health care power of attorney), and a power of attorney. If you have been successful enough to accumulate considerable assets (over $1,000,000), you may want to consider establishing a revocable living trust.

You can find software to help you create these documents yourself. Namely, Quicken's WillMaker is a popular low-cost choice for people wanting to draft their estate documents at a cheap price. However, you get what you pay for. If you want competent legal advice, you need to pay for an estate attorney. An estate attorney will help guide you through the decisions you need to make for your estate documents and suggest the best ways to accomplish your wishes.

3. Pay off your credit cards.