Take a chance. You're young, so you have decades to ride out the stock market's ups and downs. Consider putting 80% or more of your retirement funds into stocks or stock mutual funds to take full advantage of their potential for growth. If investing baffles you, consider opting for a "lifestyle" or "target maturity" fund: You pick a target retirement date and let experts do the rest. (See "Start with a single mutual fund.")
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Be strategic about debt. Pay off those credit cards and resolve not to carry balances in the future, because the interest you pay is money down the drain. Then focus on paying off private student loan debt, which typically carries a variable rate. But don't necessarily rush to pay off federal student loan debt or mortgages, which tend to be relatively cheap and tax-deductible. Instead, make sure you're contributing the maximum to your retirement accounts and have your other financial bases covered before accelerating payments on those debts. (See "Your money priorities, first to last.")
Pay attention to your credit scores. Credit scores are the three-digit numbers lenders (and others) use to help gauge your creditworthiness, and they're key to your financial life. You'll pay higher interest rates and have more trouble getting loans if your scores are poor, and bad credit can cost you jobs, apartments and higher insurance premiums. Pay your bills on time, keep credit card balances low, and apply for credit sparingly to keep your scores in good shape. (See "Your 5-minute guide to credit scores.")
Updated June 11, 2009
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