David Bach The Automatic Millionaire

Last week, Yahoo! launched its new Personal Finance site. Maybe you're a regular visitor to the site or maybe part of your New Year's resolution is to better manage your money.

No matter the reason, you're in the right place at the right time if you have an interest in improving your personal finances. You're being smart about your future, and we're glad you're here.

Stop Worrying About Money

Life should be simple and enjoyable. For many, however, it tends to be complicated and worrisome because of one huge problem -- money.

A study conducted by the AARP revealed that one in four baby boomers say the worst thing about their lives right now is their finances. And according to a recent survey conducted by Harris Interactive, money woes were among the key concerns for the majority of Americans -- an unsurprising statistic considering that money affects every aspect of our lives.

Life is about much more than money, though. You can gain the freedom to live the life you dream of by breaking the financial handcuffs of living from paycheck to paycheck, worrying about debt, and losing sleep over surviving your retirement.

A Case Study

Recently, I met a woman named Harriet at one of my seminars in Washington, D.C. She was in debt and hadn't saved a dime, and was losing sleep, depressed, and extremely worried about her future.

"I'm 52 years old and I've done everything wrong," she told me. "I'm divorced and recently remarried, and am now working 45 hours a week to make ends meet. I've got nothing in savings, and I don't know what to do.

"Last year I went to a financial planner. I paid him $500 to run a financial plan for me -- and he told me that in order to be able to retire in my 60s I needed to start saving over $2,700 a month. Considering that after taxes I only take home about $3,500, his plan was ridiculous."

Harriet's financial planner had upset her so much that she hadn't been able to do anything about her financial situation. She was truly stuck.

It's a Marathon, Not a Sprint

I wasn't surprised by how hopeless Harriet felt. After all, it would seem impossible if you'd never even jogged a mile and were suddenly told to run a marathon.

Learning to save is a lot like running a marathon -- you need to build up to it by training gradually. It's too overwhelming to go from saving nothing to saving $2,700 a month, so you need to start slowly and keep it simple.

Consequently, I asked Harriet if she could save $10 a day. She felt that was totally doable -- I even got her to agree that she could get her husband to save $10 a day. That adds up to be $7,300 a year.

If Harriet paid herself that $7,300 and put it in a solid, diversified investment that earns 10 percent (less than the stock market has averaged since 1926), she would have $461,947 in 20 years

It also turns out that Harriet's employer offers a 401(k) plan that matches 50 percent of what each employee contributes. That $20 a day she saves plus the 50 percent match equals $30 a day, which adds up to $10,950 a year -- which, at a 10 percent annual return for 20 years, would give Harriet a grand total of $692,924.

Back to School

At first, Harriet was shocked by my calculations. Then she got mad. "Why didn't the guy I hired last year explain it this way?" she asked. "He made my situation seem impossible." She was silent for a moment. "You know," she said finally, "they should teach this in school. My whole life would have been different if I'd know this before."

Harriet is absolutely right -- they should teach this in school. But they don't. It's up to each of us to educate ourselves about improving our financial situation.

After all, regardless of age, status, or situation, we all control our financial destiny. Whether you're in your teens or your 80s, and whether you're single, married, divorced, or widowed, you can take charge of your financial future.

Learn Something New Every Day

One of the worst financial cliches is that failing to plan financially is planning to fail. No one plans to fail, and, happily, it's never been easier to get started on a financial plan. Web sites, books, magazines, and newspapers offer a wealth of information at your fingertips, most of it absolutely free.

I encourage you to take some time today to explore all that Yahoo! Personal Finance has to offer. Bookmark the site and make it a daily habit to read about what's new -- just like the millions of others who do.

Make a commitment to read at least one article about money every single day. You'll be amazed at how quickly you start to expand your knowledge. The more you learn, the more interesting it gets, and the more involved you'll want to be. Knowing what's going on with your money and how to improve your personal finances can really begin to change your life.

Taking Action Pays

Harriet put her plan into place right after our meeting at that seminar. I was proud of her for moving forward -- no longer wasting time fretting about what she wasn't taught, didn't know, or hadn't done. At age 52, she accepted where she was and vowed that it was time to take action immediately.

Her new savings plan didn't make her rich overnight, but her new action plan made her feel better instantly. As Dale Carnegie once said, "The secret to life is to stop worrying and start living." Smart financial information can make living rich easier -- and living more happily a reality.