This is the first part in a series on financial literacy for lifestyle improvement:To manage your finances today requires intuition, trust, realistic expectations, and a healthy dose of scepticism. There was a time when a man?s (woman?s) word and handshake was a golden promise implicitly fulfilled; good old-fashioned attributes that served our forefathers well.

Today, you had better ramp up your sceptic radar to high, while keeping in mind that the word trust is so overused in the media and by corporate giants as to become a dirty word. It is totally disheartening to see well-intended investment professionals operate personally at the highest level of trust and integrity, only to have the profit motive of the underlying company overwhelm those efforts to the detriment of the client. Jaded comments, you may think, but one only has to read any business headline (and listen to client complaints) to see trust abused on a daily basis.

Never mind. You must learn to pick your way through the noise and the detritus, and if you need to, form a strong relationship with a trusted advisor. The reputation of most trusted advisors is sacrosanct. Do, however, use your heightened sceptic radar and increase your monitoring. Whenever you shop for any good or service, it is not a bad idea to ask these three questions: ?What?s in this for me? Is this product/service good for me? What?s in it for him/her?? Until you feel comfortable relying on your own advice, you will have to rely upon someone else. Choose carefully.There are some basic concepts that have to be considered no matter where you want to start in the process of developing financial literacy. Often, a client wants to invest in the hot idea of the day, gold, real estate investment trusts, a mutual fund or stock that earns 20 percent per year, a hedge fund returning 47 percent in one year, and so on.

What is not understood (and the investment media mavens like it that way) is that by the time these investments are hyped to death, they are often on a downward march. Yet again, another group of emotional investors fall victim to these pitches, buy at the high point and watch their ideas sink like stones. Never the best way to investing. Example, amazingly, during the crazy gold valuations of late, I have had calls asking to buy gold ? from individuals whose last investment was a fixed deposit!

Money matters involve cold hard logic, but we are so often influenced even more by money emotions. Who can resist the thought of winning a lottery or buying an exploding stock valuation? Proceeding through the finance maze in an orderly fashion allows rational and thoughtful decision-making. Employing a good process means that logical clear decisions eliminate those negatively stressful emotional influences. Goback to basics, and ask some very probing questions. How much do I need? How much do I want? How much is enough? In addition, how do I calculate the best odds of getting to that point?

Working through the list below, point by point, one ends at what you would ordinarily consider the most important concept, investing. But, your first priority is to streamline your cash flow by organising your finances, investing should be your last priority.

Become goal oriented and define your goals: immediate money concerns; five year goals; ten year goals; fifteen year goals and so on. While it only matters to you what those goals are, write them down ? a little binder book at the dollar store costs $2. Keep them in this book and refer to it regularly. It does not matter whether these goals are large or incredibly small; make them tangible to keep them right in sight. Read about them, learn about them, think about them, want them badly enough to pass up immediate treats.

Then, define the cost of each of these goals and calculate how much you have to put aside and for how long. The website has calculators that can help define this goal; there are thousands of others, such as http://www.bankrate.com/brm/rate/calc_home.asp

Do not let the cost of any of these goals defeat you.

If you want it, you will find the opportunity. Yes, I sound like a totally unrealistic dimle (as our children used to say, their slang word for dimwit).

However, I cannot tell you (without breaking confidentiality) how many incredibly successful people I have known over the years. Individuals who have started with nothing, no education, no money, no family support, no one but themselves and a dream.

Take care of the contingencies

Manage your debt wisely

Live simply: Spend less than you earn, but put aside a tiny allowance that may be spent without guilt

Spread out your risk by saving, even small amounts add up

Get into better physical shape, exercise is free

Understand the insidious effects of inflation

Invest in appreciating assets.

When was the last time you looked at any of your insurance policies? Do you have any interest in the material? The Flesch Readability Index demonstrates that people will read at a much higher level the things they find interesting. For instance, the readability gauge for standard writing averages a score of approximately 60 to 70 (out of 100). I hope I at least fit in that group. The higher the score, the greater the number of people who can readily understand the document. Comic strips are 92; the Readers Digest scored 65; the Wall Street Journal only 43. Guess the readability of Standard Insurance Policies - a score of 10 (ten)!

Even though many insurance companies now write policies in plain English, it is difficult (and tedious) and intimidating to wade through that verbiage; yet preparing for contingencies knowing that you are covered is one of the most comforting things we can do for our families. So dig out your policies and prepare for a review ? next week.

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