No magic avenue to that pot of gold; Priorities: Decide what you want to do, and what you are willing to do without, and you can be well on the way.; DOLLARS & SENSE

THE BALTIMORE SUN

James M. Beck had a goal in mind when he sat down with a financial planner seven years ago. He was 39 years old, and he wanted to be able to retire when he was 55.

But, although Beck had saved money after graduating from college, which he used to buy his first house, he hadn't put away a nickel from 1985 to 1992.

"Hey, I'm in my 30s. It will be cool," Beck told himself.

Now, Beck is 47. He has a wife, three children, his own business, a mortgage and retirement and college tuition staring him in the face. And it gnaws at him.

"I worry too much about retirement and putting the kids through college," said Beck, president of Avtek Associates Inc., a Columbia-based manufacturers representative that sells semiconductors for large suppliers. "You wonder if you are living a life, you worry so much."

The Becks are like millions of others across the country who are saddled with the daunting task of saving for retirement and college education, maintaining disability and life insurance and building a savings account for emergencies, not to mention paying the monthly mortgage and making sure food is on the table. "I think it is stressful," Beck said.

But the Beck family has taken steps to ensure its financial future. In the past four years, Beck and his wife, Ellen, have socked away hundreds of thousands of dollars for retirement. They work closely with a financial adviser, and they have put themselves on a budget.

Financial experts agree that it is not easy to meet all of the demands.

"You can't blame yourself for not being able to do everything," said Christine Fahlund, senior financial planner at Baltimore-based T. Rowe Price Associates Inc. "There is no winning, there is not magic answer, there is no magic formula. Every family has to prioritize for themselves."

Prioritizing is key when it comes to making sure your financial future is secure. Experts say consumers must decide what is most important to them: Retirement? College education? Saving for a house? It all depends on your needs.

But advice varies from one financial planner to the next on which priority should be No. 1.

Jonathan D. Pond, a financial adviser, author and public TV commentator, argues that making weekly or monthly payments into a retirement plan is not only the most important decision an individual or a family can make, but also the "most financially efficient" method of saving money.

"Before you put one dime away for college, you should be maximizing your retirement plan," he said.

Many employers offer 401(k) plans, which allow employees to set aside a portion of their salary in a tax-deferred investment account. Employers often contribute money to the account, which helps beef up the savings.

If an investor builds enough money in the retirement account, he or she can borrow against it for college or to buy a house, Pond said. "People who say they can't save are really deluding themselves," Pond said.

Fahlund agrees that contributing to a 401(k) or other retirement plan, such as an Individual Retirement Account, is crucial. But young families should first make sure that they have enough life insurance.

Fahlund recommends that her clients get several hundred thousand dollars worth of term life insurance. Term is generally the most inexpensive way to insure a life. The policies offer no savings feature, no cash value, no retirement benefits. If the policyholder dies during the coverage period, the company pays a specified sum of money to the beneficiary.

Fahlund says the key for deciding how much insurance to purchase is for each partner to determine how much money he or she would need to live comfortably.

A $400,000 life insurance policy sounds like a lot of money, but if the beneficiary spends $40,000 a year, it will be gone in 10 years. Indeed, the $400,000 will last 14 years if it earns at least 5 percent on average, and it will last 20 years at 8 percent interest with $30,000 to spare.

People "should be thinking about what would make me feel good," Fahlund said. "That is absolutely No. 1 for the average family. They need to revisit their life insurance."

College education is another issue that makes people swallow hard.

Jonathan P. Murray, a registered investment adviser at Legg Mason Wood Walker Inc., saves $400 a month for his 6-year-old and 3-year-old sons' college educations.

Murray "seeded" his childrens' education fund with a larger initial investment, so the $400 monthly savings should be enough to pay their way, he said.

"I don't want to have to be in the position of having to tell my child that he can't go to one of the better schools because of money," he said.

But many people can't save that much. "No matter how little, every bit helps, even if it is $50 a month," he said. "I don't care if you are making $20,000 a year, you should be able to come up with $50 a month. We go to McDonald's and spend that."

Fahlund and Pond agree that saving for college is important, but there are ways to pay tuition bills without having to eat hot dogs and beans every night.

Most colleges offer work-study packages, grants and financial aid. The local Kiwanis or Rotary clubs might offer scholarships. A summer job can at least pay for books and then some.

"Why shouldn't they [the students] share in paying for some of the joy of college?" Pond asked.

Pond offers words of comfort: "Everybody overcomes that challenge, our parents did it, our grandparents did it. You muddle through."

The Becks, who live in a comfortable, four-bedroom house in Ellicott City, are doing more than muddling through. In the past four years, they have taken control of their finances.

"That is when we really started to plunk money away," said Ellen Beck, 38, who works part-time for her husband.

Two years ago, they began logging every expense, and they put themselves on a budget.

"We no longer fight when we pay bills; there is not the stress there," Ellen Beck said. "We know how much we have for bills; we know how much we have to save for investment; and we know how much we have to play with."

The budget has "really been enlightening to us," Beck said. "We cut our food bills back at least 15 percent."

Beck's salary, too, has grown. In the past two years, it has ranged from $130,000 to $150,000. That is a far cry from the $10,000 a year he made when he started the business in 1987.

The Becks, who use a financial planner, have built their retirement fund up from about $50,000 to several hundred thousand dollars over the past four years, Beck said.

But saving hasn't come without sweat and pain. There were times when Beck walked the house with a calculator in his hand crunching numbers.

Finances is "all we talked about," Beck said. "The kids would say, 'Gee, when we see Dad, he has a calculator in his hand.' "

Now, the Becks are more relaxed since they are saving money. Although they have three children -- Colin, 7; Shannon, 4; and Ashley, 6 months -- they see ways to finance their college educations.

"There are a lot of programs out there that help out," Beck said.

Beck, however, has one regret -- not starting to save earlier. And he no longer plans on retiring at 55.

"I am 47, I have lost some of those years," Beck said. "I have to put bigger chunks of money away now. We have a lot of catching up."

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