Becoming educated in financial literacy will dramatically increase your chances of attaining your dreams. Money provides freedom, choices and security, and the more educated you become in finance the more freedom you have to live life on your terms.

The old rules of Social Security and company pensions determining your future are over. The new rules are: invest in your future and design it the way you want to live it; become passionate about what you do so you can do it forever; and take full responsibility and control over your destiny by learning how money works.

Contrary to popular belief, financial literacy is extremely simple: you must have more money coming in than going out. By saving and investing your money, you put money to work for you instead of you working for money. In addition, you must become a wise spender and account for every penny you spend.

I teach a simple philosophy called the 10/10/10/70 concept. Out of every dollar, give away 10 percent, invest 10 percent, save 10 percent and live from 70 percent of your income. We are socially conditioned to be consumers, but it is impossible to attain our dreams if we are in debt, living paycheck to paycheck and stressed out by consumerism.

From this day forward, start to pay the most important person first: you. When you invest in yourself and your future, you increase your wealth and your earning power. If you have not started a savings or investment account, go for a high-interest account such as ING Direct. They will give you a $25 starting bonus just for signing up, and your money will earn up to 5.25 percent interest risk-free.

Second, watch every penny that goes through your hands. Because of our consumer mentality, we tend to overspend, need instant gratification and feel “we deserve it.” However, what we ultimately want is true wealth—the freedom to be, have and do what we want. Therefore, from now on, before you buy something, ask yourself, “Does this have value and meaning, and does it move me forward towards my ultimate goal?” That is what you truly deserve.

Do not buy anything unless you run it through a financial calculator and see that it is worth every penny. Do not buy that outfit or piece of equipment unless you can truly say it adds love, value or meaning to your life. If it doesn’t, put it back. Overspending is similar to overeating. We think it will make us feel better when we do it, but soon afterwards we feel worse, and then we do it more and dig ourselves deeper and deeper.

Look at Warren Buffett. He is a perfect example of someone who does what he is passionate about and is extremely successful at it, yet who lives a simple but enjoyable life and has all the freedom, choices and security imaginable.

LORI MACKEY is an award-winning author, speaker and coach
who creates fun financial education products for kids. She is founder
of Prosperity4Kids, Inc. and is recognized as a leading expert on kids and money.