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Set financial priorities and goals to gain power over your life.

Each of us has our own particular relationship with money. Some people want as much of it as possible and are willing to devote a significant portion of their energy and time to accumulate financial assets. Others prefer to spend less time working for a living, choosing instead to have more time to spend with family, friends, hobbies, or other pursuits. Still others are motivated by a personal philosophy of simple living, and, based on principle, strive to live on minimal resources.

Most of us fall into a middle ground, wanting to have enough money so that we can live comfortably without having to sacrifice the quality or balance of our lives. No matter what your feelings are about money, dealing with it is an unavoidable aspect of adult life.

Except for those folks who are born accountants -- the people who relish tracking income and expenses and accounting for every penny -- most people find dealing with personal finances a chore. People are loath to manage their finances for all sorts of reasons, including not being comfortable with math, not having time, or even being fearful of finding out that there's just not enough money in the bank to cover the bills.

Of course, being willfully ignorant about your finances is not a smart strategy whether you are flush with cash or not. Having clear knowledge about your finances is a crucial first step in maintaining financial health or making it better. Whatever you do, don't stick your head in the sand! Remember that financial knowledge yields financial power.

Once you've made a commitment to taking personal financial management seriously, you'll need to understand what is involved. There are several different aspects to financial management, including budgeting, banking and saving, paying taxes, investing, managing debt, retirement planning, and estate planning. Of course, you don't have to learn everything at once, and you don't need to become the world's leading expert. Just start with an overview of the basics, and continue to educate yourself over time. The following list will get you started.

Drafting a personal budget is one of the best ways to control your spending. While sticking to the budget is also obviously crucial, a far more common problem is that people fail to create a budget in the first place. The truth is that creating a budget can be simple and easy. For information on budgeting, see How to Make a Budget and Stick to It.

When it comes to deciding where to keep your hard-earned money, not all banks are the same. Fees vary a great deal; you may be charged for visiting a teller, speaking with a customer service representative by phone, viewing online statements, paying bills online, overdrawing your account, or many other events. Choose a bank that has the best balance of customer service and fees, considering the types of services you plan to use the most.

Many checking accounts these days waive certain fees if you have your paycheck directly deposited into your account. Most checking accounts also come with debit cards that are accepted anywhere that credit cards are, but that use funds directly from your checking account

For savings accounts, ask about interest rates, minimum balances, and whether you are allowed only a certain number of transactions per month. If so, you will generally be charged for each transaction over the limit.

• Protect yourself from identity theft. Be sure to ask about the bank's policies to protect you from fraud and identity theft if someone uses your debit card without your permission.
   

Be sure to file on time -- and if you can't, it's easy to get a four-month extension by filing a simple form. However, an extension does not extend your time to pay any taxes owed; it applies only to filing the return. Keep all documents related to your return for at least three years after you file. For more information on paying taxes, see Nolo's Taxes & Audits Resource Center.

When considering ways to invest your money, some common possibilities include (in roughly increasing order of risk) certificates of deposit (CDs), bonds, mutual funds, real estate, commodities, stocks, and business ventures. Of course, the riskier an investment is, the more important it is that you have some expertise or are assisted by a competent agent. Also consider how quickly you will be able to cash out of the investment in case you need the money. For more information on real estate investments, see Nolo's Real Estate Resource Center.

Most people have some level of debt, either for a home loan (mortgage), car loan, student loan, or credit cards. The key is to manage debt so that it does not get out of control. Of course, controlling spending and avoiding burdensome debt in the first place is the best strategy, but if you find yourself struggling with debt or with some blemishes on your credit record, you're not alone. If this happens to you, you need to be proactive. Debt can be conquered with a variety of methods, from negotiating payment plans with your creditors to -- in extreme cases -- declaring bankruptcy. For more information about bankruptcy, see Nolo's Bankruptcy FAQ.

To rehabilitate your credit report, you can have out-of-date and erroneous information removed from it. Then focus on getting positive information into your record. And don't fall for the numerous credit repair operations that prey on your anxiety -- you can easily handle credit repair tasks on your own. For more information on credit issues, see Nolo's section on Cleaning Up Your Credit Report.

If you haven't already started planning or saving for retirement, there's no time like now to start. Popular retirement plans such as 401(k) plans allow you to put aside money for retirement, while at the same time reducing your current tax bill. If your employer offers a 401(k) or other retirement plan, it makes sense to contribute as much as you can afford into the plan -- particularly if you are fortunate enough to have an employer who matches your contribution. For more information, see Nolo's Social Security & Retirement Resource Center.

Even if it feels way too early -- or just too creepy -- to think about what will happen to your finances when you die, it's a good idea to tackle this planning sooner than later. Having a will in place will ensure that your property is inherited by the people you choose. And other estate planning tools such as living trusts can save your inheritors significant tax dollars and attorney expenses. For more information, see Nolo's Wills & Estate Planning Resource Center.

When you manage your money, you gain power over your life. Instead of wondering whether you'll meet your bills every month or offering your credit card to a sales clerk without knowing whether it'll be accepted, you'll be able to set priorities and goals, working toward what you want and earning satisfaction when you get it.

Money is better than poverty, if only for financial reasons.
  -- Woody Allen