Top 10 List for Getting a Financial Life

Dreaming about that day when your finances are organized, focused, and keeping you in the green? Look no further: Here are 10 tips for getting your money life in order, and pronto.

1. Figure out where your money goes.
Keep a spending diary for two weeks and write down everything you spend money on. This will help you get a better sense of why your cash seems to vanish each month.

2. Say no to outrageous bank fees.
Avoid checking fees by joining a credit union, which is essentially a not-for-profit bank that typically doesn't have any minimum balance requirement. (But since most credit unions don't have their own ATMs, watch out for those extra fees when using other banks' machines).
Reduce your ATM charges by visiting the machine no more than twice a month.

3. Bank online.
If you don't need teller services at your local branch, online banks offer some big advantages over their brick-and-mortar counterparts. Many offer higher interest rates on checking accounts, convenient online bill-paying services and no minimum balances for free checking.
Go to Bankrate to find the best Internet banking deals. As with credit unions, you should watch out for ATM fees.

4. Dig yourself out of debt.
If you have any savings in your bank account, use it to pay off your credit card debt immediately. Paying off a debt that charges you 18 percent (the national average) is the equivalent of earning 18 percent on your money guaranteed after taxes. There's no investment -- even high-tech stock -- that can guarantee you such a high rate of return.

5. Pay off more than the minimum. Say you owe $1,000 on a typical credit card. If you only make the minimum payments it would take you more than 16 years to pay off that debt.
If you pay just $10 more than the minimum, you would pay off that debt in less than four years. And with interest payments, if you paid the minimum balance each month, you would end up with more than $1,500 in interest payments. Pay $10 more than the minimum and you trim it down to $362.

6. Find a low-rate credit card.
Check out Cardweb and Bankrate to get lists of lower-rate cards.
Be careful of teaser rates. Many of these deals start as low as 0 percent for a few months. Then they pop back up to rates of 18 percent or higher. Before you transfer your balance to a cheaper card, make sure you know about any ''transfer fees'' involved. Also, understand the fine print behind these teaser rates -- that is, whether they apply to transfers or purchases.

7. Start the retirement marathon.
Once you start your job, the smartest thing you can do is to put money in a 401(k) -- a company retirement savings plan -- right away. If your company doesn't offer one, open an individual retirement account (IRA) at a no-load mutual fund company.

8. Make your savings work harder.
Since bank savings accounts usually pay pitifully low interest rates, look into mutual funds. In particular, index funds track the performance of popular indexes such as the S&P 500, and they have historically beaten funds that charge higher expenses. Another index known as the Wilshire 5000 comes closest to reflecting the performance of the U.S. stock market as a whole and is made up of about 7,000 stocks of a wide range of small, medium and large companies. Look into fund companies such as Vanguard that offer mutual funds that invest in the Wilshire 5000 or S&P 500.

9. Make sure you're insured.
Don't buy expensive, unnecessary policies. You definitely need health insurance and, depending on your situation, may also need disability insurance, auto insurance, and homeowners or renters insurance. What you don't need, unless you have children or other dependents, is life insurance.

10. Don't pay more to Uncle Sam than you have to.
If you receive a big refund from the IRS, it means you've had too much tax withheld from your paycheck during the year. Fill out a new W-4 form and adjust your withholding. That way you, not the IRS, can earn interest on that money throughout the year.

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