Many of the books I have read lately emphasize the important of VISUALIZATION in achieving a goal. You start with the furthest out goal (by a house) and work your way backwards to current day decisions that can be made to achieve that goal.
Example: One day I would like to own a house. (Overarching goal). Before I take out a mortgage, I should pay off my student loans (long-term). I can pay off more of my student loans once I get rid of credit-card debt (short-term).
Once you have your end result in mind (relaxing on the back deck off my kitchen with my morning paper and a cup of coffee, while I listen to the birds in my back yard), the day-to-day steps become more clear and more important to achieve.
Credit can help your or hurt you along the way. The less debt the better, but there are some basics of having a good credit score and affordable interest rates- pay any bills on time, always make your minimum payment, etc. Rather, if you don't do these things, your credit score will take a big hit down, and once your credit score goes down your interest rates go up and suddenly you owe a lot more than the $15 minimum payment you missed....
Keeping a good credit score is a good overarching goal to your financial decisions. The hardest part will be creating a lifestyle for yourself where you stay within your limits and create some cushion. Staying within your limits means spending less than you make each month. If you spend less than your monthly income, you won't need credit cards. If you don't need credit cards, you won't throw away money on interest payments. And the benefits just keep coming..
The second part, cushion, entails not just staying right within what you make every month, but actually being disciplined enough to set some aside. Start small - the emergency fund I talked about before (~$1,000) should be created as soon as possible and used only for true emergencies (and if used at all, built back ASAP).
Next, work towards saving 4 - 6 months worth of expenses - this way if you are injured, the economy crashed, or your new CEO does a lot of layoffs, you have enough backup to keep paying your bills, work on your recovery, and get to that next job and back on your feet.
Once you have an emergency fund, start thinking big! What would I like to have for myself one day? A beach getaway? A different car? Your own house? A cozy retirement? If you dream it, visualize it, and plan the steps to get there, you can achieve just about anything. Seriously.
What do you want your finish line to look like?
