Do you have 30 to 40 years until you retire? If so the miracle of compound interest can be harnessed to ensure prosperity when you do. What is compound interest? Compound interest refers to the fact that whenever interest is calculated, it is based not only on the original principal, but also on any unpaid interest that has been added to the principal. The more frequently interest is compounded, the faster the balance grows.

A potent example of its power comes from a history lesson most of us learned as children. When the Dutch arrived in what is now New York City in 1626 they purchased the land that would become New York from Native Americans in an apparently one-sided transaction for $24. The transaction was in fact one-sided but not in the way most people think. If the Native Americans had placed that $24 in a bank earning 6% interest their original investment would have been worth over $10 billion as of 2005.

The key to putting this immense power to work is to start saving immediately. And no matter what your salary you must figure out a way to sock away at least 15 percent of your pre-tax income.

If you aren't saving any of your income stepping up to the plate and putting away 15 percent probably seems daunting. It doesn't have to be.

Instead of putting away 15% immediately, work up to that figure gradually. Set up an automatic withdrawal from your paycheck to be deposited in your 401(k). If your employer doesn't offer a 401(k) set up an IRA and have the money automatically deposited there. You can invest a maximum of $4,000 for an IRA and $15,000 for a 401(k) per year. You can also invest $4,000 annually in a Roth IRA alongside any other investments you make.

Start deducting 1% of your paycheck to be deposited in your account. You probably won't even notice the difference. Then next month up your allocation to 2% of your paycheck. Then in month 3, 3%, and so on. 15 months from now you'll be saving 15% of your salary and because you implemented the change gradually your spending habits will have changed to accommodate the savings automatically.

Next step is to decide what you want to do with the money your saving. If you're comfortable investing and dedicated to making your money work for you, you'll have plenty of ideas on how to do this.

For anyone who doesn't want to spend their time this way, luckily there is a nice alternative. Vanguard, Fidelity, and most other major mutual fund companies now offer a product often called lifecycle funds. Although the specific name for the funds will vary depending on the company.

Estimate when you'll want to retire 2030, 2035, 2040 etc... and the fund automatically reallocates your money to age appropriate investments. Typically this involves shifting money from equities to bonds as you get older and near retirement.

Based on the asset allocation of these funds and the historical returns of the asset classes they invest in you can expect an average return of about 9% during the life of your investment.

So a 25 year old earning $30,000 and saving $4,500 a year can expect to retire with $613,384 at 55 and $1,520,471 if he waits until 65. This example also illustrates how the longer you put compounding to work the more astonishing the result will be. By harnessing compounding the 25 year old in this example can retire a millionaire at 65 while never receiving a raise.

With a normal career path involving raises an individual would be able to rack up a much larger nest egg.

Skeptical about these figures. Then think of compound interest as a snowball. Because of the interest you receive during your first year of investing the second year you're already earning more interest than you earned the first year even though you're earning the same interest rate. The third year, you'll be earning more than the second year, and so on. Because your investments are compounding they are growing geometrically over time, similar to a snowball rolling down a hill and expanding at a faster and faster rate as it continues to roll.

The longer the ball rolls down the hill the bigger it becomes. That is why its important to start saving now so your ball has as much time to grow as possible before you want to retire.

Every Saturday night, I put on my bi-focal glasses and flip through grocery circulars during TV commercials. I find out which store has the best sales and match them with coupons if available. I stock pile meats and house goods on sale in our pantry or freezer. I spend $50 on stuff that used to cost me $200 a week. If shop weekly, I can free up $600 per month.

Every night after work, I ask myself, "Do you want to make $40 tonight in 1 hour?" If so, I cook dinner and pack lunch for my family. The groceries cost about $4. Going out to a decent dinner and lunch for two would cost more than $40. If cook 5 nights a week, I can free up $720 per month.

Once I read, "Don't be afraid to buy used clothes. Look at your closet, they are all used now." So, shopping at Goodwill becomes our family's weekend favorite. We found out that stores donate new clothes there, and many people give away top of the line clothing. We spend $15 for a wool coat with tag priced at $150. Following the principle weekly, I can free up $540 per month.

When we go to eat at restaurants, I flip through my Entertainment book to find buy-1-get-1-free coupons or whatever others available. We get to order the best entrees on the menu. If use 2 coupons per week, I can free up at least $140 per month.

Applying these examples, you can easily free up extra $2,000 per month. Ironically, how many investors would kill to create a monthly cash flow of $300? In Real Estate, we receive big checks for profit and write big checks for expenses. What if those two scenarios don't work together in your favor? Your daily spending habits can be your biggest friend - or enemy, you pick!

Your car will serve you well, and cost effectively, if you take the time to learn a few basic maintenance skills. Ready to start? Let's go.

There are many areas where you can save real money when running your car. Some of these are:
- Actual running expenses
- Minimizing serving costs
- Reducing the slide in value as it gets older

Let's look at each of these areas in turn.

Actual Running Expenses - save on day-to-day running costs

a) Go easy on the throttle and the brake pedals. If you anticipate the traffic and road conditions a little more, you can save fuel and brake pad wear. Don't be in such a hurry, go easy on the car controls.
b) Keep the tires at the correct pressure. If they look to be wearing unevenly, get them checked. Get a wheel alignment done at least once a year.
c) Shop around for the best fuel deal. Use coupons or dockets always.
d) When it's time for new tires, shop around. Don't be afraid to ask "What is your best price?" Compare prices and brands. Get to know the most suitable tire for your type of driving needs. Play off one retailer against another. The same goes for brake pads. Don't just accept any quote.

Minimizing Service Costs - keep these to a minimum

a) Learn to do your own oil change and greasing. This is not a very arduous job. I actually enjoy the time under the car. Changing the oil, oil filter and greasing only needs to take less than 1/2 an hour altogether, but can save you a substantial amount of money. Just be sure doing this does not void your warranty. You can also easily change the air filter saving you even more money.
b) Get to know the normal noises your car makes. If at any time these change, see if you can work where the noise is coming from. That way when you go to your mechanic you won't have to say "Just fix it", you will be able to offer some ideas as to the cause of the problem.
c) Keep an eye out for loss of any fluids. This is often a cause of large maintenance costs. Check regularly to ensure the radiator water level, engine oil level, brake fluid level, automatic gearbox oil level, power steering oil and/or clutch fluid levels are all close to, or at, the "full" mark.
d) Look at the garage floor. Has oil been dropped on it recently? Was it from the back or the front of the car? Don't let oil leaks go checked. Get them looked at right away.
e) If you choose to do your oil changes, shop around for the best price on good oil and filters.
f) If your car requires some specialized servicing or repair, shop around. Get competing quotes. Play off one repairer with another to get the best price.

Minimizing the Value Slide - get the most for your car when you sell

a) Keep the car clean inside and out.
b) Keep the car polished at least once a year. Twice a year is better. Use a good brand of polish
c) Use floor mats always. Keep them clean. Keep the carpets vacuumed regularly.
d) Keep a log book of all monies spent on the car and at what mileage/kilometers they were done. Keep the receipts. This will help you get the best price when you sell if prospective buyers can see you looked after the car well.
e) Use a good quality vinyl or leather protector on your dash, seats and door trims to save them from cracking and discoloration, as they get older.
f) Look for rust spots. These can occur around the windscreen, under the doors, in the door sills and other parts of the body. If you notice any, treat them immediately with a good brand rust killer. If you feel unqualified, get a specialist to fix it right away.
g) If you see stone chips, treat them right away. These can turn into rust spots if not cared for. You could either use a auto paint spray can of the same color or touch it up with a small paint brush and touch up paint.
h) The value of your car will be enhanced at sale time if you keep it as close to original condition as possible. Try to look after the car and keep it looking like it would have been when it was new.

These are just some ways you can minimize your car ownership costs and maximize the amount you receive when you go to sell the car.

Fixing your personal finances is not rocket science. You can do it if you apply some commitment and are prepared to stick to the plan. Imagine how your world could open up if you were debt free. Imagine all the options. Quit your job, work fewer hours, have more holidays or just help others.

The proven methods listed below will work for you if you are determined to succeed and implement them in your own circumstances.

Step 1. Imagine how good life will be once the debt is paid.

Imagine for a minute how good life would be to if you were debt free. Think what you could do with the money you currently use to pay off those credits cards. You could use it to save for your future, save for your retirement, hit the sales with a clear conscience, go on holidays or save for your children's college education. Think on this often and visualize in your mind's eye how your life would change for the better once the debt was gone. If you seriously want this to happen to you it will be easier to follow the next steps.

Step 2. Do a budget.

Unless you know what your financial position is currently you won't know what targets to set, will you. Agreed? Good. The best, most simple way to do this is to set up a personal or family budget. A lot of people stop here and don't progress any further. Bad idea! This can be done very simply. Just follow the points listed below:

a) Get out your latest credit card statements. Add up all the unpaid balances.
b) If there are any other unpaid debts (not home or car) include these balances as well.
c) Calculate your (or family) monthly income - just the amount brought home each month.
d) Calculate your monthly spending. Work out where all the money goes. Don't leave any thing out.
e) Take the monthly spending total away from the monthly income total and review the answer.

Are you living beyond your means? Are you spending more than you earn each month? Are you putting any money aside for emergencies or saving to replace costly items such as the car or some major electrical appliances? Do you have any money left over to increase your monthly credit card payments? Set your self a goal of paying off your credit cards within a certain time.

The questions raised here can be addressed by putting Steps 3-7 into practice.

Step 3. Live within your means.

You can never get your finances under control if you continue to live beyond your means. The cost of living this way is the interest charged by the credit card provider. This is one of the major reasons you are suffering now. Commit yourself to live within your means. Once you have done the budget as outlined in Step 2 you can easily see what you have available to spend.

Step 4. Cut up your credit cards. (Well, maybe keep 1 for emergencies, if you have to.)

It is really important not to add more debt. Read that again. If you can live within your means, you can cut up your credit cards and focus on paying off the credit card balance as soon as possible. You may have items around the house that can be sold. Maybe a second car that is not a necessity. Sell these things and use the funds to pay down the credit card balances. Take on some extra hours at work, think of ways to earn extra income so that these extra funds can be applied to those credit card balances.

Step 5. Find bargains - have fun.

If this whole process becomes a drudgery then it will all become too hard and you won't keep going. Don't let this happen! Set some money aside so that you can, occasionally, buy those things you want. Learn how to only buy things you need and ensure they are at the cheapest price possible. Here are some hints that will help:

a) Look for sale items
b) Don't buy on impulse
c) Only use free cash funds to buy - not by credit card
d) Ask yourself "Do I really need this?" twice or three times before you hand over your hard-earned cash.
e) If there is something you really want - wait for it to go on sale.
f) Don't buy your items at the height of the fashion or the fad, wait a few weeks.

Step 6. Set aside a savings amount.

A target of 20% of your take-home salary is recommended. However, saving any of your salary is a good start. Set your goal and stick to it. The idea is to match your lifestyle to your income. Having some savings can help in emergencies, pay a larger deposit on your next car or be the beginnings of your holiday or retirement nest egg.

Step 7. Don't compare yourself with others.

Your task of living within your means will be made easier if you don't compare your lifestyle with others. You don't know, but their finances may be in a worse state than yours. If you want a better lifestyle, then save for it and/or work out ways to increase your income.

These are just the very beginning steps that you can take towards getting your finances in shape. With a little commitment and the right tools, you will succeed.