e earlier you start saving for retirement the longer the money has to grow and the money you make then grows itself. In a tax deferred account like an IRA or 401K, you don't have to pay taxes on the money you make until you take it out at retirement. That means you have more money working for you longer. If you didn't get the chance to start saving at a young age, its never too late. There are even rules that allow certain people to contribute more in order to "catch up". If your employer gives you a match for contributing to a 401K always contribuBetween rising health care costs, energy costs, and a general increase in the cost of living, now more than ever it is important to be smart about managing your money. If you are young it is important to start being smart about your money now. Getting a head start will help you down the road and make good habits for you today. As you get older this becomes even more important as things like life insurance, long-term care, and funeral costs have to be taken into consideration. While most people look at managing their money as a daunting task, it doesn't have to be. Follow a few simple rules and you will end up just fine. If you are young you may not be able to do all of these suggestions right away and that’s fine. As your income increases everything will fall into place.

1. Always keep a cash buffer in a savings account or money market account for those "just in case" situations. Depending on your level of comfort I suggest building up a balance that could pay for your expenses from anywhere from six to twelve months. This way if you have unexpected expenses or lose your job you will have something to dig into besides your retirement account or going into debt. The best part is that with online savings accounts becoming more popular you can actually earn a good percentage of interest for just having some cash around.

2. Pay off your debt as soon as you can. The age old question is do you pay off your debt first or build up you cash buffer first. I would start by building a small cash buffer, maybe three months and then focus on the debt until it is all paid off. The good news here is that while you are working on paying off your debt, your three month cushion will be growing toward that six month number for you. Pay off your credit cards first along with any other obligations that have high interest rates. Homeowners are not exempt from this rule. Paying off your mortgage as soon as possible should be a goal of yours. A great way to do this is to make some extra payments when you get the chance. An extra payment every year can take years off of your 30 year mortgage.

3. Invest in your retirement from a young age. The power of compounding comes into play here. The earlier you start saving for retirement the longer the money has to grow and the money you make then grows itself. In a tax deferred account like an IRA or 401K, you don't have to pay taxes on the money you make until you take it out at retirement. That means you have more money working for you longer. If you didn't get the chance to start saving at a young age, its never too late. There are even rules that allow certain people to contribute more in order to "catch up". If your employer gives you a match for contributing to a 401K always contribut

n't have to be. Follow a few simple rules and you will end up just fine. If you are young you may not be able to do all of these suggestions right away and that’s fine. As your income increases everything will fall into place.

1. Always keep a cash buffer in a savings account or money market account for those "just in case" situations. Depending on your level of comfort I suggest building up a balance that could pay for your expenses from anywhere from six to twelve months. This way if you have unexpected expenses or lose your job you will have something to dig into besides your retirement account or going into debt. The best part is that with online savings accounts becoming more popular you can actually earn a good percentage of interest for just having some cash around.

2. Pay off your debt as soon as you can. The age old question is do you pay off your debt first or build up you cash buffer first. I would start by building a small cash buffer, maybe three months and then focus on the debt until it is all paid off. The good news here is that while you are working on paying off your debt, your three month cushion will be growing toward that six month number for you. Pay off your credit cards first along with any other obligations that have high interest rates. Homeowners are not exempt from this rule. Paying off your mortgage as soon as possible should be a goal of yours. A great way to do this is to make some extra payments when you get the chance. An extra payment every year can take years off of your 30 year mortgage.

3. Invest in your retirement from a young age. The power of compounding comes into play here. The earlier you start saving for retirement the longer the money has to grow and the money you make then grows itself. In a tax deferred account like an IRA or 401K, you don't have to pay taxes on the money you make until you take it out at retirement. That means you have more money working for you longer. If you didn't get the chance to start saving at a young age, its never too late. There are even rules that allow certain people to contribute more in order to "catch up". If your employer gives you a match for contributing to a 401K always contribu

e something to dig into besides your retirement account or going into debt. The best part is that with online savings accounts becoming more popular you can actually earn a good percentage of interest for just having some cash around.

2. Pay off your debt as soon as you can. The age old question is do you pay off your debt first or build up you cash buffer first. I would start by building a small cash buffer, maybe three months and then focus on the debt until it is all paid off. The good news here is that while you are working on paying off your debt, your three month cushion will be growing toward that six month number for you. Pay off your credit cards first along with any other obligations that have high interest rates. Homeowners are not exempt from this rule. Paying off your mortgage as soon as possible should be a goal of yours. A great way to do this is to make some extra payments when you get the chance. An extra payment every year can take years off of your 30 year mortgage.

3. Invest in your retirement from a young age. The power of compounding comes into play here. The earlier you start saving for retirement the longer the money has to grow and the money you make then grows itself. In a tax deferred account like an IRA or 401K, you don't have to pay taxes on the money you make until you take it out at retirement. That means you have more money working for you longer. If you didn't get the chance to start saving at a young age, its never too late. There are even rules that allow certain people to contribute more in order to "catch up". If your employer gives you a match for contributing to a 401K always contribu

our debt, your three month cushion will be growing toward that six month number for you. Pay off your credit cards first along with any other obligations that have high interest rates. Homeowners are not exempt from this rule. Paying off your mortgage as soon as possible should be a goal of yours. A great way to do this is to make some extra payments when you get the chance. An extra payment every year can take years off of your 30 year mortgage.

3. Invest in your retirement from a young age. The power of compounding comes into play here. The earlier you start saving for retirement the longer the money has to grow and the money you make then grows itself. In a tax deferred account like an IRA or 401K, you don't have to pay taxes on the money you make until you take it out at retirement. That means you have more money working for you longer. If you didn't get the chance to start saving at a young age, its never too late. There are even rules that allow certain people to contribute more in order to "catch up". If your employer gives you a match for contributing to a 401K always contribu

e earlier you start saving for retirement the longer the money has to grow and the money you make then grows itself. In a tax deferred account like an IRA or 401K, you don't have to pay taxes on the money you make until you take it out at retirement. That means you have more money working for you longer. If you didn't get the chance to start saving at a young age, its never too late. There are even rules that allow certain people to contribute more in order to "catch up". If your employer gives you a match for contributing to a 401K always contribute at least that percent. If you can, I would aim for 10% of your salary.

4. Control your investing. Some people think they can beat the market by picking stocks and trading quickly. For some that is true and they can make a lot more money than the rest of us. If you think you have what it takes to beat the market I encourage you to take some of your savings, put it in an investment account and give it a go. However, keep this separate from your retirement account completely and keep it a much lower number. For example, if you have $25,000 to invest in stocks and bonds I would recommend "trading" with no more than $5,000. Put the rest in a retirement account and let it grow over time. That way you win no matter what. If you are very successful at trading your $5,000 could turn into millions in a matter of years while your retirement account barely moves. Most people would be happy with that. On the other hand, if you lost your trading money, the other $20,000 would continue to grow and after enough time can turn into millions as well. Think of the second scenario as the safety net where you work until you are 65 and retire nicely on your nest egg. If you are lucky in the market, you get to retire early.

5. Find someone you trust to help. This could be a friend, family member, or professional. This way you have someone to bounce idea off of. If you have trouble finding someone to guide your retirement money stick to this principle. Put 60% of your money in stocks and 40% in bonds and cash. You can adjust this percentage depending on your age. A 21 year old should have more like 75% in stocks while someone that is retired should thinking about a 50/50 split or even having more bonds than stock. The type of stocks should switch as well, from growth to dividend paying.

None of the information contained here is a guarantee or tested fact. It is simply an opinion that can help people get more comfortable with handling their money. If you can follow the above rules and try to cut back a little on spending you will be ahead of most other people. You may even be able to let your next of kin have some inheritance.