Review monthly expenses and focus on reducing expenses to free up cash. Boost income by adjusting withholding. Direct half of all savings to debt reduction, and split the rest between emergency fund and investing.

The 24-year-old Gibraltar man is doing well in sales at his family's business, Anchor Wiping Cloth in Detroit, which supplies and distributes wiping rags and tack cloth to auto manufacturers, furniture makers and others. He's managed to boost his income to the mid-five figures, purchase a home and head back to school.

Baskin's first financial goal is getting out of debt, which includes student loans, two small credit card balances, a home equity loan and a walloping car note that costs him more than $600 per month.

While it is a sweet ride -- an Explorer Sport Trac with the Adrenalin package -- it's also ringing up a big gasoline tab each month, since Baskin drives it a lot on business. Add it all together, and transportation costs him nearly $1,000 a month before insurance.

For his part, Baskin did get a good buy on the truck. What set him back was the fact that he also rolled in two years of payments on a leased car that he had to get out of when he purchased the truck.

All that can be achieved by a combination of focusing on where Baskin's money is going and automating a program for paying down debt, saving and investing.

On the expenses side, a preliminary review suggests that Baskin has a small monthly cash-flow deficit. While that's under control at the moment, that kind of situation can lead to increased borrowing and debt, draining all flexibility out of any financial situation.

Prather suggests monitoring expenses, either through a software program such as Quicken or Microsoft Money, newer programs, such as the one available at Mvelopes.com, or even just keeping a running total in a spreadsheet.

The next step is to examine those expenses and pare down as many of the recurring monthly bills as possible. Prather suggests starting with three expenses to reduce, focusing on the categories that seem most obvious, then moving on to others.

In Baskin's case, Prather suggests he look at the car expenses, such as refinancing or selling the truck. Baskin already trimmed more than $600 out of his car and home insurance premiums just by comparison shopping. He also got a large tax refund last year, which means, "You gave Uncle Sam a big interest-free loan. There's no incentive to over-withhold." Instead, Baskin can boost his income by adjusting his state and federal tax withholding.

With some other moves, he should be able to trim about $1,000 out of his monthly expenses. Of that, 50 percent should go to reduce his debt level, 25 percent to saving and the last 25 percent to investing.

What to do with the debt reduction is easy -- start putting the money toward the highest-interest rate debt first, in this case two small credit card balances that can quickly be retired, and the rest toward the car loan.

The savings should be automatically deposited in a money market account or other interest-bearing bank account. The goal is to accumulate at least three months' worth of living expenses as an emergency fund, Prather says. At a rate of $250 per month, Baskin can do it in four years.

The final 25 percent for investing should go toward establishing retirement investments. Baskin could consider the 401(k) plan where he works, except that it doesn't offer an employer match. Instead, Prather suggests investing the money in a Roth IRA. The advantage is that at retirement the withdrawals won't be subject to income tax -- unlike the 401(k) -- and money that goes into the account can be withdrawn without penalty in case of an emergency.

A Roth IRA can be set up through a financial institution, such as a bank, though more options are available through brokerage houses, online brokerages such as E-trade, or the large mutual fund companies, such as Vanguard and Fidelity.

As much as possible, Prather stresses, these payment and savings programs should be automated, so that the money moves without having to think about it or touch it. "If you have to even press a button, you're not going to do it," he says.

Since Baskin will be getting another good-sized tax refund when he files his 2005 taxes, that money should go toward debt reduction as well, Prather suggests. Any surplus in his monthly budget should go into the emergency fund, he adds.

Once he's started a program of saving and investing, Baskin should continue to educate himself about his financial options. Prather recommends "The Millionaire Mind" by Thomas Stanley (Andrews McMeel Publishing) and "The Finish Rich Workbook" by David Bach (Broadway), which includes financial planning worksheets and schedules.

One last piece of advice from Prather: Baskin should take his time, since habits aren't changed overnight, and give himself a bonus when he achieve his goals. "Once you're doing everything you're supposed to be doing, it's OK to give yourself a reward."

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