My first ever guest post!

I am so excited for one of my dear friends to guest post today! Melissa is a marketing manager at a local credit union here in Birmingham and has some practical advice for twenty-somethings when it comes to saving our moolah. So without further ado...

When Kristie asked me to write a guest post for her blog about one of my favorite subjects, finances, I got very excited. You see - on the Dave Ramsey, free spirit to nerd spectrum, I fall very hard on the nerd side. I've worked for financial institutions since I graduated from college. During this time, I've learned a lot about how to—and how not to—manage your finances.

What better week to share financial tips than America Saves Week?!

So I give you Six Simple Financial Tips for “Twenty-Somethings”:

1. Budget

In my opinion, the most important thing anyone can do for their financial situation is make a budget. Money is active. If you don’t tell it where to go, it will be gone in a blink. Just because you are budgeting doesn’t mean you have to cut out Starbucks runs or trips to Target, it simply means you need to give every dollar a name and be intentional with your spending. This might mean cutting BACK on some areas of your finances, but you can still have fun while on a budget. You just can’t spend more than you make.

I use Dave Ramsey’s Cash Flow Plan to budget each month—and yes, you have to update it each month to reflect different expenses that occur on any given month. You can access a copy here.

2. Set Goals

Financial goals can vary drastically based on your financial situation, but it is essential to make time to set financial goals. As Zig Ziglar said, “Aim at nothing, you’ll hit it every time.” You need to have aim and focus with your savings. It is much easier to make small sacrifices when you see a bigger picture of a goal you are trying to reach. Setting goals can seem scary at first, but it will make a big difference in how you handle your finances. Buying the cute dress or going out to a nice dinner might not look so appealing if you see it derails your chance to complete your goal on time.

3. Create an Emergency Fund

According to Dave Ramsey, you should have an Emergency Fund with 3-6 months’ worth of expenses stashed away. Emergencies WILL happen, but if you have an emergency fund, they are so much easier to handle. Having money back for a rainy day makes bad situations—car troubles, lost jobs, or medical bills—a  lot less stressful. Having an emergency fund in place can also keep you from relying on high-interest credit card debt to pay for an emergency situation.

Side note- Money from your emergency fund should be used for emergencies. Concert tickets or a great sale at your favorite store DO NOT count as emergencies. See Tip 1 and BUDGET for these items.

4. Save for Retirement

Retirement might seem like it is forever away, BUT it is never too early to start saving for retirement. While you are young, compound interest is on your side. Compound interest means earning interest on your interest. As you continue to invest in your retirement plan, you will earn on your principal investment as well as the interest you have earned on it. The sooner you start saving—the more time there is for compound interest to work.

Also if your employer offers a 401-K or retirement package with matching, you are literally leaving money on the table by not investing. Take advantage of the money they are willing to contribute to your retirement and contribute to receive the match.

5. Make Saving Automatic

This one is simple. Set up payroll deduction or direct deposit to help you save automatically. Just like the money withheld for taxes from every paycheck, if money for savings never makes it to your checking account, you more than likely won’t miss it. Saving automatically will help keep you focused on meeting your saving goals.

6. Don’t Expect to Live the Same Lifestyle your Parents are Living Now

I think one of the biggest financial problems Gen Y faces is trying to immediately live the lifestyle our parents are currently living. You must first remember—your parents worked, and more than likely worked very hard, to get to the financial place they are in now. Just because you graduated from college, got your first job, or both does not guarantee you will instantly be in the place you want to be financially. Don’t expect to immediately have a house just as big as your parents’, be able to vacation to exotic locations on a regular basis, or drive a brand new car. You’ve got to work for these things. Following the first five tips is a great place to get started! Racking up debt to try to achieve the lifestyle you want IS NOT WORTH IT. Save for the things you want. It will make them mean a lot more, and you will actually be able to enjoy them—instead of worrying about how you’re going to pay for it.

Bonus- Use a Credit Union
Truth be told- I might be a little biased, but I feel credit unions are the way to go. Credit unions typically have higher interest on savings and lower interest rates for loans and credit cards. This will help make you and save you money from the start! My credit union, eCO Credit Union, even offers a special checking account for young adults. My first box of checks was free, AND I earn interest on my average daily balance! Credit unions are not-for-profit so everything earned above paying employees, keeping the lights on, and setting up reserves is returned to members. You can’t go wrong with an organization that has your interests at heart.

Thank you Melissa for sharing such great and practical advice! It is so important that we take saving money seriously - hello no Social Security when it comes time for us to retire! I digress... It is great to know that we can start doing small things to save at a young age that will have a huge impact in the future! It's also good to mention that a great sale does not constitute an emergency. Sorry ladies :)

What other saving advice do you have for twenty-somethings? Please share!!