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I grew up in a family that insisted a percentage of every earned dollar went to savings. Once in the workforce, I was amazed how many people I met did not have any savings. It had never occurred to them to add good money habits to their regular routine. So I'm often asked, "Can you really change your financial habits? And how?"

When the economy is humming along at a nice pace, it doesn't matter that much. In this economy it does matter.

Over the last fourteen years, I have worked with thousands of clients through Down-to-Earth Finance and previously as an analyst for

Bear Stearns


Nomura Securities

. Some were institutional companies, such as

Wellington Management


Putnam Investments

, and many were individuals, especially women. The successful ones maintained three or four key regular habits in every type of market.

I noticed that in an economic boom, luxuries and inflated expenses tend to creep into our budgets surreptitiously, and saving and investing is lower of a priority because of a false sense of security. Not being aware of these behaviors creates difficulty and stress for individuals when the economy is more challenging.

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I developed the

My Money Matters

kit to help people develop and maintain these habits. The unusual format -- a boxed kit with cards and workbooks -- was designed to provide gentle, simple, and effective reinforcement for the development of good money habits. Whereas readers might read a book once, I wanted to create an interactive tool that could be used over and over again. The boxed kit is designed to do just that, by providing tools that work over different time periods: instant money tips provide immediate results, motivational money affirmations help overcome longstanding self-defeating money behaviors, and a complete financial coaching program in several pocket-sized workbooks provide a structured, yet nonintimidating method to incorporate good money habits into daily life.

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The key is to have three or four guidelines and follow them daily or weekly. It actually takes a bit more will power in flourishing economic times, but then your habits are set and you can stave off fear in a down market. Many people don't even know where to begin to manage their personal finances and tackle their investments, especially for their retirement plans.

Keep It Simple -- Your Financial Life That Is

I have seen clients walk in with 401(k) statements from five different companies, IRAs at three separate financial institutions and checking accounts at two or more banks. Would you feel inspired to tackle your money matters in this situation? I wouldn't!

Also, how can you expect to do a proper asset allocation when your investments are all over? Start by consolidating all your investment accounts to one no-load mutual fund company, such as

Fidelity Investments

, and if you have more than one bank account, pick one bank in your neighborhood that offers free checking.

Commerce Bank

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has become known for this benefit.

Have a Weekly Plan with Your Money

Every week figure out your weekly spending for your bills, discretionary income, short-term savings and retirement savings. Don't just deposit the cash into your checking account and let it languish. In addition, set-up automatic monthly transfers from your checking account to online savings accounts that generate higher interest rates than your local bank and to diversified no-load mutual funds. A target date mutual fund, such as

Fidelity Freedom 2030

(FFFEX) - Get Fidelity Freedom 2030 Report

, is an excellent option, which combines instant diversification and investing your money based on your time frame, especially for retirement.

Ways to Plug the Little Items

These are one-time exercises where you examine your spending and monthly expenses and clean the house. Chances are you will not feel many of these changes, but it will loosen the belt on your finances considerably. Before you know it, you will have a few extra hundred dollars a month to go towards retirement savings, paying off of debt, or that summer vacation. Some easy ones:

Stop ordering in food. Even if you don't feel like cooking, go to the supermarket and pick up a prepared food meal. You will still spend less.

Get rid of credit cards that have annual fees.

Change banks if you do not have free checking or free ATM.

Check your bank statement if your bank has snuck in fees for negotiable items (for example, canceled checks).

Reduce your investment expenses by switching to no-load mutual funds, eliminating brokerage fees, reducing management fees and shopping for a broker with low trading costs.

Examine if your HELOC (home equity line of credit) is charging you a fee.

Manage Your Risk

I have received many phone calls from clients that wanted to use their current home equity as the down payment for a second home. This second home can be for investment purposes or for a vacation. This is not managed risk. It sounds like a great plan in a thriving economy, but unless you have cash for six months of mortgage payments and cushion for repairs, don't consider it. This doesn't mean you should not take any risk at all.

For example, if you want to buy a second home, plan for it. Be aggressive about saving that money in a no-load mutual fund, such as a balanced or moderate allocation fund, until you have enough for a solid down payment and proper cushion. You will sleep much better at night when rental rates are decreasing or you don't have a tenant for three months.

Regardless of the economy, your money matters and a weekly priority of reading instant money tips, viewing money affirmations, getting organized, and taking an active interest in your investments and retirement will ease any anxiety you might be feeling. It will enable you to see concrete results, such as higher 401(k) balances or even a fantastic vacation to Hawaii.

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The has a revenue-sharing relationship with under which it receives a portion of the revenue from book purchases by customers directed there from Galia Gichon is a personal finance expert who founded Down-to-Earth Finance. With over 14 years financial experience, an MBA in Finance and the author of the "My Money Matters" kit, Down-to-Earth Finance provides unbiased financial education. You can visit her at