I’ll try to make this article short and sweet by providing you with the top tips for improving your finances for the New Year.

Create Goals for Yourself: Unless you write down your goals, they’ll just be dreams that go unrealized. The process of creating goals, writing them down and taking action on them almost guarantees you that you will achieve them. Setting goals helps create a end point and in the process of figuring out how to reach your goals, you will develop a plan that you can put into action. I create my goals using the B.E.S.T. method. The letters stand for Believable, Energizing, Specific and Time.

Get a Mentor: Everyone talks about the importance of having one, well why don’t you have one? They’re not hard to find. They could be the successful owner of a local business your frequent, a family friend, or a coworker who is investing in real estate on the side while continuing to work full-time.

Wherever you find your mentor, make sure you choose wisely and don’t have to pay for their services. A good mentor will be willing to help out because they feel like giving back.

More on the subject of Giving Back later.

Invest in Yourself: You are your most important asset and as such you should be investing in well, you. I’m talking about increasing your financial education through the use of books, web-sites and online forums. I can’t stress how important it is to keep on learning after you graduated high school or college.

Just because you’re done with school doesn’t mean you can’t start your own university of knowledge and fuel your mind with the latest information and tactics for investing, budgeting, building your business and investing in real estate.

If you skipped college or never went due to extenuating circumstances, you might look into signing up for a part-time program. I got my MBA at night and it was a difficult process balancing work and school, but I did it and my company paid for most of it. Talk about a win-win situation.

Manage Your Credit Cards: Pay off your credit cards immediately with any excess cash you have above and beyond your Emergency Fund. If you can’t do that how about taking advantage of those teaser balance transfer rates? Just make sure in your attempt to reduce the cost of borrowing (ie, getting out from under those high interest rates) you don’t pay excessive transfer fees.

At some point you’re going to have to learn how to pay cash for things and/or budget for them. So if you want to buy that new plasma TV, I suggest you wait until you have money (read: cold hard cash) to pay for it.

Speaking of setting aside money to pay for planned expenses; it’s about time you had enough money set-aside for unplanned expenses. Just get started. See my article resource box for a great resource on saving money.

Create a Debt Repayment Plan – Get Out of Bad Debt: Don’t sweat it if you’re in a hole already and have a mountain of debt that you need to pay down. Debt is a form of leverage that can be used to create massive wealth, most notably through real estate investments. Using debt to buy an investment piece of property is an example of good debt.

You mean there is such a thing as good debt?

Yes. There are two types of debt: good debt and bad debt. According to Robert Kiyosaki, author of the successful Rich Dad book series, Good debt puts money in your pocket every month. Bad debt takes money out of your pocket every month.

Bad debt will bleed you dry if you’re not careful. Resolve to not add any additional bad debt and create a debt repayment plan that will eliminate your bad debt. Once you have paid of your bad debt, the money that was going toward paying down your debt can now be used to buy investments that add to your wealth.

In short, don’t buy liabilities that are disguised as assets (new cars, big homes and the like). These things will bleed you dry if you’re not careful.

Create an Emergency Fund: You should aim for between 3 to 6 months of your living expenses. My rule of thumb is that three months is adequate for someone who has a relatively secure job and six months is for someone who might be a consultant or has an unsteady income stream.

Start by socking away a set amount each week into what I call a Cash Can. Maybe it’s $5 or $10, but just do it. You get bonus points if you do it automatically ala the Pay Yourself First method of using an automatic transfer from your bank account. Put the funds aside into an account that’s hard to get to so you won’t be tempted to take money from it.

Resolve to Pay Yourself First: The most important bill you have to pay every month is the one you pay to yourself. The easiest way to fail to pay yourself first is not to make it automatic, that is, have money pulled directly from your savings account bi-weekly or every month.

I have money pulled from one bank account and placed in another on the 15th and 30th of every month. I did it this way because I’m paid bi-weekly. The reason paying yourself works so well is that the money is set aside before you have a chance to spend it. Aim to pay yourself at least 10% of your take-home pay. That might seem a little high right now, but that’s where the next tip can help.

Resolve to Live Below Your Means: One of the seven habits most millionaires have according to the research done by Stanley and Danko, the authors of The Millionaire Next Door, is that of being frugal. Being frugal is just another word for Living Below Your Means. Living below your means is not the same thing as being cheap, it means choosing not to spend all your income.

It means shopping around for the best deals and not spending all of your raises or bonuses on the latest doodad or gadget.

Again, it’s not about being cheap or living like a pauper. It’s about choosing not to spend every last dime you make so you have surplus funds left over each week that you can invest and help provide for your future.

Max Out Your Retirement Contributions: Politicians passed the 2001 Tax Reform Act and gave you a bunch of goodies, the most important of which was the increase in the amount you can sock away into your 401(k) and IRAs on a tax-deferred basis. Depending on your income, you can now sock away $12,000 into your 401(k) and $3,000 into your IRAs in 2003. You can put away even more if you’re over the age of 50.

Give Back: When you take the above advice and put the tips into effect, you’re going to immediately see a change in your lifestyle and your wealth. Be grateful for what you have and start to give some money away to charity

If your budget is currently too tight to donate money, how about donating your time? You can volunteer at the local shelter, soup kitchen, boys and girls club or a host of non-profit charities. If volunteering isn’t your cup of tea, how about donating the knowledge in your head? Lawyers do pro bono work and just about anyone can give away their professional services for free.

Also don’t forget you can give away your knowledge by creating a newsletter or setting up a web-site. It’s an easy way to give back and help others.

That’s why I write these articles. It’s my way of giving back and helping others avoid the mistakes I have made, as well as my way of passing on what I’ve learned about investing, personal finance and motivation.

There are a number of other things you can do, but I thought I’d post these main ones to kick off the discussion of major things you can do to improve your finances this year and to ensure that this is a prosperous New Year for you and your family.