When you’re exhausted from living paycheck to paycheck; when you’re sick and tired of being sick and tired about money; when you’ve said “where did all our money go?” to many months in a row – you are ready for a Total Money Makeover.

Before you get started you must do a budget – put a name to every dollar that comes in before it gets there so you know what its purpose is. After you have your budget in place then it’s time for the baby steps. Baby Step One: Get $1,000 in the bank fast for life’s little emergencies.  Baby Step Two: Start the debt snowball – pay off all of your debts, except for the house, smallest to largest. To those who say mathematically this doesn’t make sense - if you were so great at math you wouldn’t be in debt. Your way isn’t working so try mine. Baby Step Three: Finish the emergency fund – put three to six months of expenses in the bank and only use it for emergencies.

Close your eyes and just imagine what it would be like to have no payments except for the house and have three to six months of expenses in the bank. When you reach Baby Step Four that’s what your financial picture will look like. This is where you get serious about wealth building.

Baby Step Four: Invest 15 percent of your income in retirement. That’s 15 percent of before tax gross income invested toward retirement. Why not more? You need some of your income left to do the next two steps, college savings and paying off your home early. Why not less? Some people want to invest less or none so they can get a child through school or pay off the home superfast. I don’t recommend that because those kids’ college degrees won’t feed you at retirement. I’ve know too many seventy-five-year-olds with paid-for homes and no money. Plus, by getting started now, the magic of compound interest will work for you.

Remember this is a rule of thumb, so if you cheat down to 12 percent or up to 17 percent, that is not a huge problem, but understand the dangers of straying far from 15 percent. If you underinvest, you will one day be buying the classic cookbook “72 Ways to Prepare Alpo and Love It.” If you overinvest you will keep your home mortgage too long, which will hold back the wealth-building power of your Total Money Makeover.

Do not include your company’s match as part of your 15 percent. By the same token, do not use your potential social security benefits in your calculations. A recent survey said more people under age thirty believe in flying saucers than believe they will receive a dime from “social insecurity.” I tend to agree. It is your job to take care of you and yours, so part of your Total Money Makeover is to invest now and make that happen. If, by some miracle, social security is there when you retire, you’ll have extra money to give away. I’m sure you’ll forgive me for that.

Growth-stock mutual funds are what I recommend investing in for the long-term. Growth-stock mutual funds are lousy short-term investments because they go up and down in value, but they are excellent long-term investments when leaving the money longer than five years.

When your company will give you free money, take it. Always start calculating your 15 percent where you have a match but don’t include the match in your 15 percent. If your 401k matches the first three percent, the three percent you put in will be the first three percent of your 15 percent invested. If you don’t have a match or after you have invested through the match you should fund Roth IRAs. There are some limitations as to income and situation but most people can invest in a Roth IRA. The Roth grows tax-free.

Start with any match you get, and then fully fund Roth IRAs. Be sure the total you are putting in is 15 percent of your total household gross income. If not, go back to 401ks, 403bs, 457s or SEPPs and invest enough so that the total invested is 15 percent of your gross annual pay.