efore you can learn how to manage your money, it's important to understand the difference between what you want and what you need.

Needs are necessary for survival. Wants are things you would like to have but can live without. For example, you need housing, food and clothing, but you might want to own a nice car.

One of the most interesting facts in the book The Millionaire Next Door, is that most millionaires drive older model cars. They don't spend all that extra money just to have a new car. They save their extra money or invest it in something that will give them a return.They put their money to work for them.

Think about your needs and wants. Write down how much you spend on these items each month. Are you spending as much or more for your wants as you spend for your needs? If so, it may be time to rethink how you spend your money.

Money management - planning - putting yourself on a budget and sticking to it will help you reach your goals and get what you want.

Ask yourself these questions to find out how you can improve your spending:

1. Am I unable to save money? If so, this means you're not reaching your goals. Saving money means your savings increase month over month.
2. Have I reached the limit on my credit cards? If so, this means you have no access to additional funds and could be in trouble in an emergency situation.
3. Do I pay only the minimum amount due on my credit card bills because that's all I can afford? If so, this means you're probably paying more money in interest than you should.
4. Do I "borrow" money from my savings or emergency fund to pay the rent or other bills? If so, this means that your savings are being used now and not being saved for the future, which means they're not "savings" at all.
5. Are my monthly expenses, not including my rent or mortgage, more than 20% of my take-home pay? If so, this means that your debts are too high for your income.
6. Have I ever been asked to cut up a credit card or been denied credit? If so, this means you have a blemished or insufficient credit history.

If you answered yes to any of these questions, it's time to take a closer look at your spending habits. You could be risking your credit and setting yourself up for even bigger financial worries in the months/years to come.

Ben Franklin said, "A penny saved is a penny earned." Today it means that when you save money, you earn a way to get what you want. By saving money today, you invest in your future.

Saving money is never easy. It's hard work. Temptations to spend are everywhere. Every day we are bombarded with ads for easy credit or no payments for one or two years.

We read about cool stuff and "special offers" daily. They're designed to keep us from saying no. If you stay focused on your budget goals, and do not give in to temptation, you can save money.

The first step is to compare your income to your expenses at the end of the month. Is there any money left over? If not, you need to reduce your expenses.

Obviously, you can't change your mortgage or your school loan payments each month. You can't change your fixed expenses, but it takes a defined plan and some time to make all the arrangements. You can change your variable expenses almost immediately. Take the extra cash from reducing your variable expenses each month and open a savings account. In future months take the extra cash from reducing expenses and put it in your new savings account. Don't connect this savings account to your ATM card.

Find ways to reduce expenses. Can you eliminate $20 a month from your entertainment budget? How about another $15 from clothing? Be realistic, but don't give up. Your savings will grow with each dollar saved.

Make it a priority to save every month. Over time your savings will add up, especially if you put it in a bank that pays interest.

For example, if you save $35 a week just $5 a day you'll have:

• $1,820 after 1 year
• $9,100 after 5 years
• $18,200 after 10 years

With interest, you'll have well over $20,000 in just 10 years. What could you do with $20,000?

It is extremely difficult to stick to your budget while using credit cards. It's so easy to charge everything you buy. The inclination is to say, "It's just $30 - I can pay it off at the end of the month." By the time the end of the month comes around, there have been so many 'just $30' charges that you can't pay it off; you can only make a payment. Then the interest charges pile up, and you've maxed out your credit. Even worse, the 'just $30' is no longer the smallest amount you owe.

We all like the convenience of "low minimum monthly payments." But, if your payments are so low that only the interest is paid off, you are not reducing the actual debt. Instead, by paying more than the minimum, you can shave months even years off your debt.

Limit yourself to two or three cards, and try to pay more than the minimum monthly payment. If you can, pay off the balance in full every month. If you keep your credit card purchases small and infrequent, this isn't so difficult.

Only use credit cards for emergency spending needs. Have a payment plan that fits your budget before you use the card!

A debit card looks similar to a credit card and works like a check. It withdraws money directly from your checking account, so there's no interest and no debt. When you use your debit card, be sure the money is in your bank account to cover the charge, or you could be overdrawn.

Be careful with your debit card. If it's stolen, your bank account could be drained. If your debit card is lost or stolen, be sure to report it to your bank immediately.

A budget measures your income (the money you make) against your expenses (the money you spend). Budgeting helps keep you from spending more money than you make. You can plan in advance how you spend and save, and you'll have the satisfaction of achieving goals.

Follow these simple steps to create your budget.

To calculate your monthly income, multiply your net income by the number of times you are paid in a calendar month. To calculate your net annual income, multiply your net monthly income by 12.

Fixed expenses (such as rent, loan payments, etc.) stay the same every month. Fixed expenses also include periodic bills (like car insurance) that come once a year or more.

Variable expenses (such as groceries, gas, utilities, entertainment, clothes, etc.) change from month to month. To budget for variable monthly expenses, take the average of 3 months of variable bills (such as groceries).

Don't forget to include large, occasional expenses like emergencies, tuition and vacations in your budget. You never know when an emergency will happen. If you don't plan for emergencies and periodic expenses, you could be in trouble.

The final category on your budget worksheet is indebtedness, which means how much money you spend to pay off debts or loans (such as credit card payments).When you add up all the expenses in this category, you have your total indebtedness.

Once you know your priorities, those items that are the most and the least important, you can figure out how to spend your money. If taking a vacation once a year is a priority for you, adjust your spending in order to save money every month. Your priorities should fit into your budget, not work against it.

Learn how to save money and spend money wisely, and you're on your way to achieving your goals and having the things that are important to you.

With a budget and goals, you can start setting your sights on financial stability for the future. You can get there if your goals are clear and realistic.

With each achievement, you move closer to financial security

A goal is something you aim for - a destination. Maybe you want to pay for your child's college education, take that dream vacation, or buy your retirement home in that special place. Achieving them takes work. You can get there if you plan ahead.

Take a minute and think about your future. Do you want more out of life than you have now?

How will you get there without planning ahead?

Most of the things we want are not free. We have to figure out a way to pay for them. Goals give us something to aim for.

Achievements give you confidence and a sense of accomplishment. Set realistic goals and you'll be amazed at how much you can do.

Your goals can be for the short, medium or long term:

• Short-term: within 1 year
• Medium-term: within 1 to 5 years
• Long-term: more than 5 years

Setting goals is easy once you understand how they work. Follow these steps to create your list.

1. Write Them Down. Start by writing down your goals in positive statements; for example, "I will achieve A," not "I won't spend money on D anymore."
2. List Target Dates. Give each goal a realistic target date, such as "by next February" or "6 years from now." Remember to list them as short, medium and long term goals.
3. Set Priorities. Figure out which items are most important to you and your family. Then number them with number one being the most important.
4. Do a Reality Check. Make sure your goals are realistic and attainable. If you say you're going to save $50,000 by next summer, you're probably not going to achieve that. Instead, be honest with yourself and be flexible. Your goals should change over time as your priorities change. Your priorities will change as you achieve your goals.

Mark each goal off your list as you achieve them; you'll feel a sense of accomplishment. Staying focused on your goals becomes easier as you mark them off your list and can see your accomplishments.

If your goal is long-term financial security, you need to have realistic goals and keep your focus on achieving them.

Be positive, flexible and realistic as you make your list of priorities and target deadlines. Plan for this year and for the next 5 or more years.

Re-examine your priorities and goals regularly. They will change over time. Be realistic about your progress and adjust your plans accordingly.