Establishing financial independence can be an exciting journey filled with new experiences or a confusing trip filled with frustration. As you begin the journey, you'll need to ask yourself a lot of questions. When do I need to start budgeting? How do I establish credit? How do I set up my own checking and savings accounts?

This brochure will provide answers to these questions and help you take your first steps on the journey to financial independence. Although these questions might seem overwhelming, remember that this journey, like all journeys, begins with a single step.

Money management is the organized process of using money and other financial resources, such as credit, to achieve both long- and short-term goals. Creating a budget is the first step you can take to reach those goals.

To develop a budget, start by looking at your income and estimating your day-to-day expenses. Large expenses, such as rent or car payments, should be easy to account for. It will take more effort to account for everyday items, such as food, clothing and hobby expenses. These items often amount to more than we care to admit.

If you really want your budget to be practical, include estimates of optional expenses, such as those for entertainment and vacations. During the first month or two, record every dollar you spend to keep track of where your money is going and whether your budget figures are accurate. If the same overspending patterns continue, re-evaluate your budget to see if your expenditures are too high or your budget is too low.

Once you've established a budget, the next step is to set some long- and short-term financial goals. These goals will be different for everyone. Your short-term needs might include a vacation or a new car. Or, you might want to begin saving for a long-term goal, such as a home or retirement.

When choosing a bank, it pays to remember that all financial institutions are NOT alike! For example, you may choose among savings and loans, credit unions, and banks to handle your finances. Each financial institution will have its own benefits and restrictions. Find out about these facts before making any decisions.

Here are some questions to keep in mind when choosing a financial institution:

NOTE: The number of people using ATMs is increasing every day, but they are not appropriate for everyone. Some consumers have found that 24-hour access to these machines encourages them to spend more and, thereby, deplete their savings. You should also be careful to operate the ATMs properly. For example, make sure you have privacy when entering your personal identification number (PIN). Be careful to keep your PIN in a separate place from your bank card. Keeping these two items together could be a grave mistake in the event that your wallet or purse is stolen.

Credit is a way of life for many americans. For better or worse, the U.S. economy is built on the use of credit. The key is to establish and use credit carefully. Maintaining a strong credit history will help you secure a mortgage or a large loan in the future.

Credit cards range from bank cards, such as VISA and MasterCard, to travel and entertainment cards, to retail cards for specific department stores and gasoline companies. Most bank cards can be used to obtain cash in case of an emergency or to order products through the mail or over the phone. Most car rental companies will also require you to have a credit card in order to rent an automobile.

Gasoline companies and department stores are good places to obtain your first credit card. These credit cards rarely charge an annual fee, and by paying your bills on time, you can establish a good credit history.

Here are some questions to keep in mind when applying for credit cards:

Carefully consider which card is right for you. If you intend to pay the balance of the card each month, you don't have to worry about the interest rates for purchases not paid for at the end of the billing cycle. By the same token, if you plan to use the card several times during each billing cycle, avoid a card which charges a transaction fee each time the card is used.

While there are many benefits to establishing a strong credit history through the use of credit cards, you should also be aware of how to protect yourself from fraud. Having your card stolen is not the only way the card can be misused. Credit fraud can occur through misappropriation, such as the use of your card number without your permission. Always request and then destroy your carbons to avoid the chance of counterfeit cards being made from them. A dishonest clerk might make an extra imprint from your credit card for his or her own use. Also, be wary of giving your credit card number over the phone.

Carefully record all your credit card numbers and store this information in a safe place. You should also record the telephone number you will need to report a lost or stolen card. Find out how much you are responsible for if the card is misused or stolen. Generally speaking, federal legislation has set the liability level at $50.

If you are renting an apartment or house, be sure that you understand your rights and obligations as a tenant before you sign a lease. Remember, your lease is a binding contract. You must fully understand the terms of that contract. The best way to protect your rights as a tenant is to know them. To find out about those laws or regulations that may affect you, call a local government information office for referral to the proper agency.

Here are some questions you will want to keep in mind when renting an apartment or house:

You will also want to consider renter's insurance that provides a package policy to protect your property against fire, windstorm, and theft. Some policies also include personal liability coverage for injuries to others. If you are a renter and would like protection from liability, you may have to purchase an additional policy. This policy is relatively inexpensive. A renter's policy can also cover living expenses while your damaged home is being repaired.

The small up-front costs can make leasing an automobile attractive to consumers struggling to save the funds for a down payment. Be aware, though, that once the lease has expired, you generally own nothing. In addition, lease agreements sometimes require that you pay a fee if you have driven extra miles or if the condition of the car has deteriorated. Buying a car can make more financial sense than leasing one. When shopping for a car, remember that car loans are available from a number of sources.

• Here are some questions to keep in mind when financing an automobile:

*Lenders are required by federal law to give the annual percentage rate (APR). Make sure your lending institution's interest rate matches the APR.

When estimating your expenses for an automobile, remember to take into account the expense of insurance. Automobile insurance can protect you against loss or damage to your car as well as claims when the car you are driving injures others or damages their property.

Here are some questions to consider when buying automobile insurance:

For anyone beginning their career, retirement usually seems a long way off. But keep in mind that successful retirement planning begins years before you actually retire. To begin planning for retirement, consider establishing an IRA (Individual Retirement Account) or participating in a 401(k) plan offered by your employer. By setting aside a small amount of your paycheck each pay period, you are less likely to feel the pinch. Many companies will even match a percentage of your savings. Check with your employer to see which savings plans are available.

Insurance also plays a key role in your overall financial plan and should not be viewed as an isolated purchase. Life insurance enables you to provide a pre-determined amount of money to a specified beneficiary when you die. Annuities provide retirement benefits. Annuities will accumulate cash value that you can use at retirement or that can be withdrawn as cash before retirement. Current interest rates may determine fixed-annuity cash values. A variable annuity cash value will vary based on performance of a portfolio of securities.

Both life insurance and annuities provide valuable tax benefits because your investment may grow on a tax-deferred basis. There are several categories of life insurance. The best kind of coverage for you will depend on your age and personal circumstances. Make sure the policy meets your needs.

Setting a budget, handling your banking, establishing and using credit, renting an apartment or house, and starting a savings plan for your long- and short-term goals are all actions you will take on the journey to financial independence. Learning about possible pitfalls, and knowing which questions to ask, should make your journey a smoother one.

This brochure can serve as a useful reference and checkpoint guide. If you have more specific questions, consult a CPA or other qualified financial advisor.

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