Are you prepared for your financial future? Investing and learning about finances can be fun and rewarding. Actions taken today can determine the lifestyle you will have in your retirement years.

The following seven steps can help you to prepare for a successful financial future.

1. Establish a plan.

Do you know how much money you will need to retire? How much money will you need for your child’s education? Having a plan will enable you to meet long and short-term financial goals and determine how you can improve your financial future. The Social Security Administration says you will need approximately 75% of your current income to maintain your current standard of living in retirement (inflation not included). Take an inventory of your current assets and liabilities. Will you be able to live off of that nest egg in retirement? Subtract your monthly expenses from your monthly income. Can you be saving more money each month? Create a savings goal for your retirement. Then develop a strategy to get there. If you are unable to calculate what you need to retire, work with a financial advisor; it is well worth the investment.

2. Maximize Retirement Vehicles

According to the Spectrum Corp’s 1999 Affluent Market Research Program, the top financial goal of women is to maintain a comfortable standard of living during retirement. The best way to accumulate money and maximize growth for retirement is in a tax-deferred program. Maximize the amount of money you put into IRAs and your 401(k) plan each year. When investing in retirement plans your contribution may be income tax deductible and the money isn’t taxed from year to year. In many employer-sponsored programs (especially 401(k)) contributions are automatically deducted from your paycheck and in some plans your employer will also match your contributions. If you are not at least deferring the amount needed to take full advantage of the match, you are turning down free money.

3. Implement a Systematic Investment Program

America’s largest assets—401(k) accounts and home equity—have been built through systematic investment programs. By investing money every month or every quarter, you are taking advantage of compounding and growth over time. You do not have to have a lot of money to invest—start with whatever you can (e.g. $25 per month) and begin as soon as possible.

4. Diversify your Investments

The saying “don’t put all of your eggs in one basket” is especially true in investing. People that had all of their eggs in the technology basket last year suffered because that asset class had a down year. If those same people had created an asset allocation program and diversified their investments in securities with a variety of objectives, they would have spread out the “risk” and probably would have had a better overall rate of return. Proper diversification between the major asset classes, cash/money market, bonds and equities and the various investments within the overall asset classes (e.g. international equities), is critical to long-term investing success.

5. Keep your Spending and debt in check

Establish a budget for your weekly and monthly spending. Make sure you are not living beyond your means and you have the ability to invest continually. It is fun spending money, but getting out of credit card debt is hard, so nip it in the bud before it even starts.

6. Use Equity Mutual Funds for Long-Term Investing

At age 65, a woman can expect to live 19.2 years. As life expectancy creeps higher, it is important to build an investment strategy that will outperform inflation and not erode over time. Consider equities for long-term investing (at least 5 years). Historically, equities have outperformed the major asset classes.

7. Review and Rebalance Accordingly

Once you have a budget, an investment plan and have implemented the strategy, most of your work is done. Review your plan and investment options annually. Make sure that your investments are performing well vs. their peers and are still allocated according to your plan. As the investments grow, your allocation will need to be modified and your plan will need to be changed as life events occur.

The final step is to START NOW! There is no better time than the present. Einstein said that one of the miracles of the modern world was compounding interest. The sooner you begin the quicker you can take advantage of compounding interest and building your financial future.