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Everything you need to know to survive a financial drought, launch a dream, and retire like a rock star
Many of us begin our 20s deep in debt. We owe thousands in credit card, student loan, and car payment debt, and owe more every day. (Thanks, interest payments). We live paycheck to paycheck, with practically no savings, emergency cash, or any investments. "Retirement" remains the business of those folks who need all those medications on TV (think bladder, cholesterol, and erectile dysfunction ads). Money gurus at Charles Schwab & Co., Inc. say 78 percent of us make retirement planning the last item on our financial priorities list. To remedy those problems, consider these tips and resources to help kick-start your plans for a more cushy financial future.

Money Do's and Don'ts
Listening to a 50-year-old banker dictate why your checking account sits in the single digits sucks almost as much as a lecture from your parents. We need advice from someone who knows our struggle. Nathan Davis, a 23-year-old service banker at Wachovia Bank in Harrisburg, Pa., barely affords the occasional beer on weekends while paying off undergrad loans and getting a master's degree in business at Penn State University. He shares his advice on how to avoid common mistakes.

1. Borrowing Cash
Carrying too many credit cards with high balances on them looms as a major credit card problem, Davis says. "Credit cards should be used for emergencies or only if you know you can pay it off before it collects interest," he says. "It is not free money." He cautions that while having a credit card for every store you shop at just because of a discount may be tempting, it is not worth the 15 percent off. "Having a lot open at once causes a problem for your credit score," Davis says. "Maybe have one or two used on a regular basis." And carrying a credit card with more than half the balance used can also be problematic. "The credit reporting agencies don't like it, and the higher the balance, the longer it will take you to pay it off—which means even more interest will build up," Davis adds. "So interest charges eat up whatever discount you thought you received."

2. Future Savings
It may be hard to imagine that, one day, you too will be as old as John McCain. (Minus the rich spouse and private jet). "Someday it will come," Davis says. "And you will be sorry if you have nothing saved." A lot of people think that because they are young they do not need to think about retirement. "Social security probably won't be around for the people of our generation," he says. "And even if it is, it won't be enough to live on." Unless you work someplace that has a pension plan, a 401K provides the only employer-sponsored path to save for retirement. Most conventional workplaces will match the amount you put in your account up to a certain sum, he adds. "If you're not taking free money that is pre-tax, you're not making a smart decision for later in life." Even though you may choose to invest in the stock market or other venues of investment—namely, places that may immediately make you more money—"your 401K serves as the most consistent option and will yield the most dough in the long run," Davis says.

3. Common Blunders
Let's face it: living beyond your means can be tempting. "Young people have an unrealistic view of their expendable income," Davis says. "In reality, we have no expendable income, but having a paycheck makes us feel like we do." He also advises to refrain from buying a brand new car. "Having a car payment every month, on top of living expenses, bills, and loan payments, not to mention any outstanding credit card bills you may have, will greatly outlast the good feeling you get riding home in your hot ride," Davis says. "If you do buy a vehicle, opt for a used one. And always make sure you are buying a car that equals no more than half your yearly income."

4. Unhappy Hour
This could be filed under extravagant purchases, but exists as a big enough problem to have its own category. "Spending money at the bar is like throwing money in the garbage disposal," Davis says. "You can never get it back." The more drinks consumed, the more eager you feel to buy yourself and others drinks. Maybe even the whole bar if you are generous (or drunk) enough. This money yields many other uses that generate results far better than a hangover. Young people like to go out and have fun, but there are ways to do it without breaking the bank. "Drink moderately or buy a case and have your friends over to your place," he says. "By doing this, you'll save a cover charge and taxi fee."

For ages 20-29:
Median net worth: $7,901
Median income: $27,726
Households with debt: 76%
Median total debt: $20,800
Carrying credit card debt: 46.6%
Have negative net worth: 24.7%
60 days late on a bill: 10%
Owe $10,000 or more on credit
cards: 3.6%
No health insurance: 31.8%
source: MSN Money online

Credit Score Breakdown
800-850: Living the good life
700-799: You're doing pretty well
600-699: Be a little nervous
500-599: It's looking pretty bad
Below 500: You may be living in a cardboard box
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