Make your saving automatic. If you haven't already, sign up for direct deposit and payroll deduction at your credit union. With direct deposit, your paycheck is automatically put into your credit union account. With payroll deduction, an amount is transferred regularly from your paycheck to build your savings account or to pay off a loan. Make your investing routine, too, by taking advantage of employer-sponsored retirement plans and mutual fund automatic investment plans.

Jumpstart your retirement fund. Getting an early start is one of the easiest ways to build your nest egg because you've got time and compound growth on your side. Even small amounts saved now will add up to big bucks down the road. For example, if you invest $150 a month starting at age 25 in a tax-deferred account that earns an 8% average annual return, at age 65 you'll have accumulated a total of about $523,650. Compare this to if you had waited to begin saving until age 35 -- your nest egg would total only about $223,553. That $18,000 you didn't save between the ages of 25 and 35 ends up costing you some $300,000.

Plan for retirement

Prepare for the unexpected. Make it a priority to review your health, disability, life, vehicle, homeowners, and personal liability insurance policies to make sure you have adequate coverage. If you're a renter, make sure you have tenants insurance since your landlord's insurance only covers the building itself, not your possessions, and it's personal liability protection doesn't extend to you. Tenants insurance is relatively inexpensive, so there's no reason to go without it.

Also make it a priority to build an emergency fund equal to three to six months' living expenses. Keep this money where it's readily accessible, such as in a savings or money market account, and resist the temptation to dip into it for anything but true emergencies, such as illness or unemployment. If you do, replace withdrawals as soon as possible.

Build a solid a credit history. Now's the time to make a spending plan, limit your debt, and pay your bills on time. If you don't have an established or strong credit history, check with your credit union for information about share-secured loans or credit cards. With this type of credit, you open a savings account with a specified balance and your account serves as collateral. You can't use the money in the savings account, but it usually earns interest while you build your credit history by making prompt monthly loan payments.

Keep your debt under control. You'll never get ahead if you get buried in debt now. As a general rule, limit your consumer debt payments (excluding your mortgage) to no more than 10% to 15% of your monthly take-home pay. Also limit the number of credit cards you have since lenders may not want to loan you money if you already have substantial credit available – even if you don't plan to charge that much.

Smart Borrowing information

Check out your credit reports. Lenders, employers, landlords, and insurers all rely on the information in your credit reports to help them make decisions about whether to loan you money, hire you, rent to you, or insure you. So it's smart to review your reports periodically to verify that the information is accurate, especially before you need to borrow for a large purchase, such as a vehicle or house.

Even if you're not planning to borrow money soon, it's important to review your credit reports regularly since your current lenders monitor your report. Plus, you never know when you'll be applying for a new job or an insurance policy. Moreover, with credit fraud on the rise, it's a good idea to check your credit reports every so often for any accounts or transactions that aren't yours.

For details on how to order your report and how to correct any errors you find, contact the three national credit reporting agencies: Experian 800-682-7654 (www.experian.com), Equifax 800-685-1111 (www.equifax.com), Trans Union 800-888-4213 (www.transunion.com).

More information on Credit Reports

Be smart about student loans. If you're paying off a student loan, take advantage of any ways to get your interest rate reduced. For example, some lenders will cut their interest rates if you have a history of on-time payments, or if you agree to have payments automatically deducted from your checking account.

Do your best to stick to the standard payback schedule, but if you're having trouble making your payments ask your lender for some help. You may be able to lower your payments by extending your repayment period, switching to a graduated repayment schedule, or consolidating your loans into a single debt over a longer term. If you end up taking this route however, be aware that you'll end up paying a lot more in total interest over the life of the loan. So gradually increase your monthly payments as your income grows.

Look to your credit union for good deals on financial services. Surveys show that credit unions, as not-for-profit financial cooperatives, generally offer more favorable terms than elsewhere on savings accounts, loans, share draft/checking accounts, and credit cards.

In fact, according to Bank Rate Monitor, the Credit Union National Association, and the Consumer Federation of America, credit unions on average charge lower rates than banks for consumer and mortgage loans. Moreover, credit unions on average pay more than one percentage point more in interest on interest-bearing checking accounts, money market deposit accounts, and certificates of deposit.

Take advantage of the student loan interest tax deduction. You may be able to deduct up to $2000 in interest you pay on qualified student loans from your federal taxes. (The deduction was $1500 for the 1999 tax year). The deduction increases to $2500 in the year 2001 and thereafter.

If you're a single tax filer, you may qualify for the full deduction if you're modified adjusted gross income is under $40,000, or for a partial deduction if your income is between $40,000 and $55,000. If you're married and file jointly, you may qualify for the full deduction if your income is under $60,000, or for a partial deduction if your income is between $60,000 and $75,000.