There's a reason that when you do an internet search for ¡°songs about money you get over 5 million hits in .25 seconds: everyone wants a solid financial future. Unfortunately, not everyone knows how to get one. Establishing a solid foundation ensures that you and your loved ones will have enough money to live comfortably and securely. You can build this financial foundation by establishing a plan of action.

Step 1 - Tax-sheltered Investments

If your employer offers a pretax retirement plan it may help you meet your goals faster than regular taxable accounts. The investing strategy that works for most people is:

1. Invest enough in your employer plan to take advantage of any matching funds.

2. If eligible, invest in a Roth IRA

3. Pay off any high-rate consumer debt (credit cards, car loans, etc.)

4. Max out your employer pretax plan.

5. Invest in a taxable account.

Step 2 ¨C Asset Allocation

Anticipating what you're going to need money for 30 years from now is hard, but it's the key to saving for your future goals. One of the most important things to do is to start investing and to invest appropriately. Asset allocation ¨C how much you have invested in different investment types ¨C is the single most important facet of investing.

You need to establish what your goals are, when you want to achieve them and what risks you're willing to take. A quick search on asset allocation calculators will help you figure this out. Then you can set up your investment contributions to happen automatically and just let it grow.

Unfortunately, just saving isn't enough. You also need to make sure that you have protected yourself from setbacks.

Step 3 - Emergency Fund

Your emergency fund exists to help you through an unexpected crisis such as losing your job or other large expenses. The rule of thumb is to have 3-6 months worth of expenses saved in a low-risk, liquid savings account. The more risky your job and lifestyle, the more you should have on hand.

By saving appropriately in an emergency fund you protect your taxable and retirement portfolios because if an emergency happens you won't be required to liquidate your investments or go into debt in order to cover the expenses. Doing either of those things can do serious damage to your investment plan and set your goals back by years.

Step 4 - Insurance

Acquiring adequate insurance coverage reduces the risk that, should something happen to you, your family will have to struggle financially. There are two types of insurance that most younger people should consider.

Disability insurance will replace some/all of your income if you are unable to work. If you're in a specialized field, make sure that you get appropriate disability insurance that covers you not being able to work *in that field* otherwise you may find yourself with a forced career change.

Life insurance will protect your family in the event of your death. It will ensure that your family can maintain its standard of living. Some people have a life insurance policy through their employer so before you buy your own, figure out what you already have and how much you need to supplement it. People who have no dependents probably don't need to worry about acquiring life insurance assuming that they are not leaving behind a pile of debt. However, if you have a family you should figure out how much you'd need to pay off your home and cover your children's living and education expenses through college. You may also want to include enough for your spouse to be retrained for the workforce if they are a stay-at-home parent.

Something else to consider is long-term care insurance which will cover the cost of a nursing home or other specialized facility. And, of course, keep your auto, health and homeowners/renters insurance up to date at all times.

These simple steps can get and keep you on the road to a strong financial future.

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