The financial sector has been the focus of negative news stories in recent months. The bank sector is still facing difficult times, and the real estate sector is suffering from falling home prices and reduced lending. This all seems to indicate the end of an economic boom that masqueraded as an economic boom. However, given its shallow foundation, no one can be surprised at the rapid economic corrections that will follow.

It can be difficult for people to grasp the enormity of trillions of dollars in debt when they hear it. However, the sum is actually made up of the personal borrowings of millions of people. Most people realize that they are part the overall statistic and it doesn’t seem like a problem until there is one.

As a way to gauge where you are at the beginning of your journey, I refer to Robert Kiyosaki’s rules on how you rate on the money management and investing scales.

Level 1 in money management: You are likely to be at this level if you spend a lot time wishing that things will turn out well or if you don’t know your outgoings in full. You may be tempted to use credit cards, even though you might have assets that have debt attached. It is possible that you own the most recent gadgets and cars, but you have made easy monthly payments to purchase them over the long-term. Most likely, you don’t have any savings. You don’t have to borrow more or earn more money; you need to change your money habits.

Level 2 in money management. If you regularly save a little money in a low-risk, low-return account, you’ll likely be at this level. It is possible to save money for a specific purchase and then go out to buy the item. This will make you back where you started. In reality, you are saving money to buy. Most people don’t like credit cards. They prefer to only use cash or debit cards. While it is important to save some money, you risk wasting your most valuable asset: time.

Level 3 in money management: You may be able to contribute to your company’s pension plan. You will generally have a solid education, but not financial literacy. You won’t be able to read financial reports, balance sheets or annual reports. Although you might feel that investing is risky, it’s best to leave money decisions to professionals. You might even be skeptical about investing in the stock markets yourself, having heard of the stock market crashes. Many people at this stage will jump into penny stocks and the lottery to try to find the “big one”, the one that will make everything easy. It is difficult to imagine what the next level will look like at this stage. Everything appears to be fine on the surface, and in fact it is just like many other people.

Level 4 in money management: This level allows you to actively participate in your investment decisions. Your long-term plan will be clearly defined and will help you reach your financial goals. Before you can invest in an investment, you will have spent time and money on your education. You may also have worked with a financial planner. You don’t need to be a long-term investor yet. Learn about investing and get rid of bad debts as quickly as possible. If you want to live a happier life, level 4 is essential. Level 4 is a must if you want to become financially independent.

Level 5 in money management: This is the level where investors can be more aggressive with their strategies. They are focused and have good money sense. They have a proven track record of consistently winning. They are highly educated in investing and seek out more information. They will have assembled a winning team with professional advisors and have the track record to prove it. They are able to win regardless of market changes and have a clear understanding of their investment principles. They are focused on growing their assets, and they reinvest the gains to grow their asset base. They are often well-versed in tax law and have a team to help them manage their assets. They often pass down good principles to their kids and the family fortune to the next generation.

Spend some time on the weekend to determine which level you are in, and then devise a strategy for how to get to the next level.