I'm sure most of us are concerned with the quality of our life after retirement, and we find that the approach of almost all people to prevent being broke at 65 or 70 follows a common patterngo to college (or at least save enough money to go to college), find a high-paying job, set aside a part of their salary and put them in a bank or invest them in the hope that they will grow considerably in the future.

Unfortunately, this does not work for everybody all the time. While there are some people who might luck out in investments that give a high rate of return, others might not even be able to have a savings account (living hand to mouth as they barely make ends meet), and end up old, poor, and miserable.

And this is what happens often!

So how can we steer clear of a possible retirement crisis? Financial planning is the key, and below are a few pointers that would bring you financial freedom.

Establish your goals.

Before anything else, you need to determine your financial goals, be it short-term or long-term. Are you planning to have a dream vacation? Buy a house? A car? Save for your children's college education? Preparing for your retirement?

A clear-cut objective will give you the motivation to and drive to go through your financial plans.

The basics: how to have the money?

Once you have your goals in place, the first step towards financial freedom is to build your base. This means acquiring the funds or the money that you will cultivate in the long run. There are two ways to do this:

Borrow. The advantage to borrowing is that you can have the money that you need instantly. Newlyweds could have their dream house on the first year of their marriage by taking out a housing loan instead of having to wait 10-25 years to purchase it. The disadvantage to borrowing is the idea of incurring a liability, the burden of having to pay an amount that is significantly greater than that which you have actually received.

Save. Setting aside a certain amount of money in the form of savings might deter your future plans, but it offers a worry-free way of building up your baseit adds up to your assets, not your liabilities.

Still, most people find it hard to save money and take the easy way out by borrowing. The following are helpful hints on how to make saving work for you:

Know your 'bottom line'.

The primary thing to do before you decide to save for the future is to know your regular cash flowhow much money are coming in and how much of them are going out. A breakdown of your income and expenses, preferably on a monthly basis, would be a big help. You can construct a budget table that lists the following:

Income Salary Bonuses Commissions Interest income (from savings and other investments) Rental income (from properties that are rented out) Social security and/or pension income Alimony, others Expenses Rent/mortgage Utilities (electric, phone, cable, etc.) Food Clothing Insurance payments (health, home, life, auto, etc.) Debt payments (credit card bills, child support, alimony, etc.) Health expenses (medical/dental) Childcare expenses (schooling, etc.) Tax payments (income, property, etc.) Transportation expenses (tolls, gas, car payments/maintenance, fare, etc.) Personal (allowances, etc.) Recreation (vacation, etc.) Others (gifts, etc.)

Subtracting your total income from your total expenses will yield your 'bottom line':

A positive net figure means that your income is greater than your expenditures, and this is the amount that you save given your existing income and spending habits.

A negative net figure, on the other hand, means that you do not have anything left to saveyour expenditures are greater than your income. However, this would help you evaluate your spending habits to determine where you can cut back your expenses, like renting videos instead of going out to movie theaters, or dining at home instead of eating in restaurants.

Your savings as your 'expenses'.

Now that you know your bottom line, you can already have a ballpark figure of what you can save (say, in a month). Knowing the amount that you have to save, stick to it. The trick here is to view this amount as part of your expenditures, so the first thing to do once you receive your paycheck is to subtract the amount that you allot for savings before allocating the rest on your other expenses.

Stay on track.

Once you become used to the practice of saving a specific amount on a regular basis, do your best to keep on it. Although there are times of crises or urgent situations that may require you to deplete your savings (an urgent trip to the hospital, etc.), do not be disheartened. Instead, learn to appreciate the value of your savingsthat they are there, something that can be used in times of emergencies. Just carry on with it, and try to stay on track.

Your financial strategy: aim high or aim low?

You now have the moneythe task is to have it grow. Are you going to put it in a bank or at the stock market? Before deciding which financial vehicles to use, you have to evaluate yourself to determine to which group you belong:

Conservative. This group has a lower tolerance for risks. They are more concerned with the preservation of their capital as well as the safety and stability of their investments, even if they mean lower yield.

Aggressive. This group has a high tolerance for risks. They are willing to brave the market ups and downs in exchange for higher (or maximum) returns.

Knowing your level of risk tolerance would help you choose the types of investments that suit you and your goals.

Where to put your money?

Now you are ready to expand your money base. There are a number of investment opportunities to choose from, and some of them are listed below:

1. Savings accounts 2. Money market deposit accounts 3. Certificates of Deposit (CDs) 4. 401(k) Plans 5. 403(b) Tax Sheltered Annuities (TSAs) 6. Individual Retirement Arrangements (IRAs) 7. Keogh Plans 8. Stocks 9. Bonds (Savings bonds, T-bills, Zero coupon bonds, Municipal bonds, Insured bonds, Convertible bonds, High-yield bonds) 10. Mutual Funds 11. Annuities 12. Social Security 13. Life Insurance (Term, Whole, Universal, Variable) 14. Health Insurance 15. Disability Insurance 16. Long Term Care Insurance 17. Homeowners Insurance 18. Auto Insurance 19. Estate Planning

Additional pieces of advice:

A rule of thumb: diversify. When investing your money, it is not advisable to 'put all your eggs in one basket.' Spread it out across several types of investments so that you can have other options when one of them is no longer working out well.

Never put your money on something that you do not fully understand. Study them carefully. Ask questions. Seek advice if you must.

Take your time. Do not pressure yourself when making decisions.

See? Earning money is so easy. With these guidelines, you no longer have to worry about not having enough money for retirement. To quote:

"Once the laws of getting rich are learned and obeyed by anyone,that person will get rich with mathematical certainty." -- Wallace D. Wattles