10 financial commandments for your 20s

6. Establish credit

In order to qualify for the best interest rates on a credit card, auto loan or mortgage, you need to start building a solid credit history. In fact, a good history can also save you a bundle on your auto insurance or help you land an apartment or a job. (See "What bad credit really costs you.") Building a good credit history in your 20s will ensure it's ready when you need to use it.

If you didn't have a credit card in college, one way of getting credit now is to apply for a secured card: You make a deposit -- usually $300 to $500 -- in a savings account as collateral, and you can get the money back after one year of using the card responsibly. You can also start building a credit history through PRBC, an alternative credit bureau that gathers data on regular payments for rent, cable TV and other recurring expenses. For more, see "9 ways to build credit from scratch."

7. Develop a marketable skill

"Your own earning power -- rooted in your education and job skills -- is the most valuable asset you'll ever own," says Knight Kiplinger, the editor-in-chief of Kiplinger.com. Your 20s is the time to invest in yourself to acquire those skills that will start your career and boost your earnings.

• Advice from MSN Careers

It's also a good idea to start building and maintaining a network while you're young. Personal contacts can come in handy to further your career or enhance your personal life.

8. Cut the financial umbilical cord

You have your own apartment and your own paycheck. You may even have your own spouse and children. Isn't it time you grew up? If Mom and Dad are still preparing your taxes, balancing your checkbook or managing your investments, consider this: Whoever controls your finances controls your life.

• Why so many grads 'fail to launch'

The desire for parents to help their kids is nothing new, as is the desire for kids to let them. Just don't let it get in the way of learning to succeed financially on your own. Your parents aren't going to be around forever to help you out. You may also reach a point in your life when you don't want your parents to know the intricate details of your finances. Start now to cut the cord. Kiplinger has four tips to help ease the transition.

9. Marry wisely

You and your spouse create the most important team in your life. You'll want to make sure your team works well and shares similar financial values, so you can work together toward common goals. Money can drive a wedge between even the strongest of couples. So choose a spouse with whom you can keep communication open, avoid keeping money secrets from and regularly assess your goals and progress. (See "Your 5-minute guide to love and money" to make sure your union is on the right financial track.)

And, of course, it helps to base your marriage on something deeper than physical attraction. Divorce is costly and can derail even the best-laid financial plan.

10. Have some fun

Personal finance doesn't have to be boring. Taking the time to travel and have new experiences before you have a couple of cranky kids in tow is not only easier but cheaper. Consider a semester abroad in college. Seek out inexpensive entertainment close to home. Take a class just for fun. Or take advantage of cheap travel options such as youth hostels, camping and off-season travel deals.

Build some memories, meet new people and try new things. But please, don't go into debt to do it. Save up ahead of time, and you'll be in prime position to make the most of your 30s.

This article was reported and written by Erin Burt for Kiplinger's Personal Finance Magazine.

Published Feb. 25, 2009

< previous |  1 | 2 |