If you presently don't have at least $1,000 in an emergency fund, start now to work toward that goal. It's important to have adequate cash available. 

Having an emergency fund can ease the situation when there's no regular income for a time. This fund can prevent families from turning to credit cards to pay the bills.

This savings fund can stave off reaching into 401(k) accounts for living expenses. If you're younger than 59 ½, you're looking at a 10% penalty by taking money out of your 401(k).

Save for future goals.

Once an emergency fund is set up, save for short- and mid-term needs in money market or other liquid accounts. These savings may be for transportation, education, or a down payment for a home.

Where do you see yourself financially one year, five years, or ten years from now? What are you doing this year to work toward your goals? Remember that your outlook determines your outcome.

Focus also on long-term investing. Start by putting 5% or more of your income in a retirement savings plan. Simplify the process and transfer money automatically from your paycheck to savings. If your employer offers a retirement savings plan such as a 401(k), contribute the maximum amount that will be matched. Then put extra money into a Roth IRA, where investment earnings can grow tax-free.

Whenever possible reduce investment fees. Lower investing costs with index funds, sending the least possible amount to Wall Street. Jack Bogle, Vanguard mutual funds founder, says, "Indexing wins whether markets are efficient or inefficient." He adds: "Smart investing boils down to two simple rules: 1) Ignore fads. 2) Stop trying to beat the market" (Money, January/February 2011).

"Slow and steady" wins the race in investing. Be patient and in time you'll be profitable.

If you can not save a small amount now, it's likely it won't be any easier in the future. Making deposits now into long-term accounts brings more confidence and security to your future.

Plan what you want your reality to look like. Plan for a better year ahead.

February 2, 2011

Copyright (c) 2011 Deborah Nayrocker. All rights reserved. Permission to reprint required.

Deborah Nayrocker is the author of The Art of Debt-Free Living and Living a Balanced Financial Life. Her Web site is www.artofdebt-freeliving.com