Being financially literate is an important part of planning for your future. It goes far beyond just balancing your budget—it means having the skills and knowledge you need to make sound decisions with your finances. It’s a wide-ranging topic (one that  can’t be covered entirely in a single post), but here are some general directions to help you get started.

Budgeting

Creating a budget sounds daunting, although it doesn’t have to be. Apps like Every Dollar and sites like Mint.com make it easier than ever to stay accountable. Just enter your income, then decide where you need to spend your money. You might be surprised to find out where your cash is actually going.

It’s a good idea to save at least 10% of your paycheck, so make sure you allocate that amount in your budget.

Building Your Emergency Savings

You want to aim for six months’ worth of expenses saved in your emergency savings account. This is to help you out in case of an emergency, such as a major car repair or job loss. When you have emergency funds, you won’t have to go into debt every time something goes wrong. If you’re saving 10% of your income, it shouldn’t take too long before you reach your ideal emergency savings amount.

Understanding Credit

A credit score ranges from 300 to 850, and anything over 700 is considered pretty good. Having a high credit score is a great advantage when you want to take out any kind of loan, including a mortgage. You’ll have lower interest rates, which saves you money in the long run.

It takes time and effort to build good credit by consistently paying your bills, but you can decimate your credit fairly quickly by defaulting on loans or filing for bankruptcy.

Managing Debt

In order to keep your credit score in line—and save you some stress—it’s a good idea to be careful about how much debt you take on and how you pay it off. Some debt is unavoidable, such as student loans and a mortgage, but you should avoid high-interest credit card debt or any unnecessary personal loans.

If you do have credit card debt, try to make double or triple the minimum payment until you pay it all off.

Planning for Retirement

Even if you don’t plan on retiring for decades, it’s important to start saving now. If your employer offers a retirement plan, don’t wait to sign up. If they offer a match, that’s even better.

If your employer doesn’t have a 401k plan, you can look into a Roth IRA. Whatever route you take, make sure you’re putting away enough money so you’ll be comfortable in your retirement years.

Investing

Once you have your emergency savings set aside and you’ve signed up for a 401k or Roth IRA, it’s time to start thinking about investments. Investments include mutual funds, stocks, bonds, and real estate—but be sure you don’t put all your eggs in one basket. This means you should diversify your investments. That way if some parts of your portfolio aren’t very profitable for a few years, your other investments will help make up the difference.

Avoiding Identity Theft

Protect yourself from identity theft with a reputable credit monitoring service. Don’t give out your social security number unless absolutely necessary, and don’t carry the card around with you. Watch for unauthorized transactions on your credit and debit card statements.

While you’re at it, use a trusted password manager, such as LastPass or 1Password, and create complex passwords for all of your online financial accounts.

While not easy, focusing on (and working toward) these seven items will help you become more financially literate. It will also pay great dividends for your financial future.