The next phase of “Managing Money Tips by Age” series is how to manage money in our 20s.

College is a time of new experiences in a person’s life–new friends, new faces, new responsibilities and new money issues. Often, the college years are the first time that young adults are required to manage their own money.

Here are some tips that we hope will help. (Source: www.uiowa.edu)

• Before you begin college, talk to your parents, older siblings and older friends to get a good idea of what college life will be like financially. Ask them about how they manage their money, what they experienced when they were your age, and what you can expect. These words of advice can be very useful, and you will probably learn more than you expected from their experience. You may also wish to check out books from the local library on the topic of money management or budgeting.

• Make a budget and stick to it! Having a budget will put your mind at ease about your finances and allow you to take control of your money instead of letting it take control of you. Be sure to figure in all of your income and expenses, and be honest with yourself. It doesn’t work to have a budget that is unrealistic for your lifestyle or leaves out expenses that you really have.

• Learn how to economize. College life can be expensive, but it also offers many opportunities for saving money. Start out by searching for coupons (local newspapers are a good place to start). Coupons can be especially useful when it comes to eating out. Restaurants in college towns often offer great savings in coupon books distributed on campus. Also, buy your textbooks used, borrow books or check them out at the library if possible. Give up or cut back on cigarettes and/or alcohol–both of which can be very expensive. Instead of spending $4 to $8 going out to the movies, rent a few and stay in with friends. If you get them on the right nights you can usually rent movies for around a dollar each. Turn economizing into a personal challenge and see how much money you can save yourself.

• Take advantage of the free and cheap activities on and around campus. Universities are famous for having excellent entertainment at a low, low price. Instead of going out to a movie or a professional show, go see your school’s theater or music department performances. English and writing programs at universities usually offer author readings and lectures throughout the year. Joining a club, group or organization insures you will always have something to do and someone to do it with–even if it’s stuffing envelopes or making phone calls.

• Value your education. Keep in mind that obtaining a college education may require sacrifice on your part. However, it provides you with the opportunity to learn and eventually seek employment in the field of your choice. It is also well known that college graduates earn more in their lifetime than someone without a degree. What you are sacrificing and working for is well worth your effort!

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If you’re in your twenties, now’s the time to start saving for your future and learning how to be a smart borrower.

Get started with these four tips. (Source: membersfunds.cunamutual.com)

• 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.

• Jump start 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-free Roth IRA that earns a 7% average annual return, at age 65 you’ll have accumulated a total of  $393,722. Compare this to if you had waited to begin saving until age 35 — your nest egg would total only $182,995.

That $18,000 you didn’t save between the ages of 25 and 35 ends up costing you more than $200,000*.

• 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 its 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 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.

• To see where you stand, run your monthly loan payments through a debt level software program or online calculator.  From there, figure out how to pay down your debt with the least amount of interest using a debt reduction software program or online calculator.

*This is a hypothetical example used for illustrative purposes and does not represent a purchase in any particular investment. This example does not reflect any fees or charges associated with investing, which would lower an investment’s overall performance.