Guest Blogger

How To Be Financially Stable When You're Young

Courtesy of Christopher Griffith/Gallery Stock

If you're a single guy who has never heard of a BabyBjörn, you probably think now's the time to blow paychecks on trips to Rio and extra inches of flat-screen. But the average 45-to-54-year-old college grad makes only about $22,000 more than his 25-to-34-year-old peers, so take this advice: Start saving for the future today—before you become a family man with a big mortgage and weekly toy upgrades. One kid can cost you as much as a new Beemer every year. And that doesn't take into account the cost of baby-making, up dramatically now that nearly 20 percent of infants are born to women over 35. "I have several clients doing in vitro," says Mark Dorfman, a financial planner in New York. "That can be $15,000 per try."

So even if you're years from buying a minivan, compound interest is your best friend. A 22-year-old who stashes $3,000 annually for 10 years and then doesn't touch the money until he's 65 will have more retirement money than a 32-year-old who saves that amount every year until he's 65. When it comes to buying real estate, make sure you'll be okay with pushing a stroller around the block you choose to live on, because if you start reproducing there and the economy takes a turn for the worse, you might be stuck for a while, putting the kid to bed amid the din of honking horns. And well before you begin reinvesting in legos, you should open 529 plans (college savings accounts) for your future offspring—assuming you're certain the little buggers will be university material—to start squirreling away the $200,000-plus each degree will quite possibly cost. Finally, while you make peace with the self-sacrifice to come, try your best to marry up. Yaran Noti

Maryland-based financial adviser Michael Beriss on what's really best for you and your money

1. Keep your investments liquid: That organic farm your buddy wants you to help fund? You could father two rug rats before you see any return.

2. Don't buy rental property: If you sink your savings into a Cape Cod cottage and then move to L.A., you're going to be interviewing tenants from 3,000 miles away.

3. Skip the life insurance: Some promote variable life insurance for saving for your kids' education, but if it doesn⿿t matter financially to anyone if you die, there's no need to be covered.

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