Savings tips for young workers

Saving for retirement, typically not a top priority for young adults, is tougher to accomplish in a down economy.

Young adults tend to be more focused on launching their careers, and starting a family. Plus if you are unemployed, working only part-time or going back to school, saving can be very difficult if not impossible. But where there's adequate income, there's a way. The key is setting up a system and sticking to it.

Here are some tips on how to make saving for retirement easier for those who might not otherwise be inclined to plan for three or four decades in the future:

1. PAY OFF CREDIT CARDS FIRST. Paying down debt with high interest rates such as credit cards is essential before setting aside money for the future.

2. BUILD UP AN EMERGENCY FUND. Put aside six months' expenses in a liquid, accessible fund that can be tapped for unexpected expenses such as car repairs or medical bills. Otherwise, you will slip back into debt with each substantial, unplanned expenditure.

3. SET UP AUTOMATIC WITHDRAWALS. Contact your bank to have a predetermined amount removed from each paycheck, or taken from your checking account on the 1st or 15th of every month, into a separate savings account. That way you won't be tempted to skip a contribution.

4. START SMALL AND MOVE UP. Even with an entry-level salary, most people won't miss 2 or 3 percent of their paycheck. Start with that sum just to get going. Try to bump up your savings rate to 10 percent of pay as soon as possible. The longer your contribution remains in the single digits, the more you will have to step it up in later years to make up for lost time.

5. DON'T TURN DOWN FREE MONEY. If your employer has a 401(k) matching program, be sure to contribute enough to your account to qualify for the company match. There's no more surefire way to get extra cash for nothing.

6. SAVE YOUR RAISES. Every time you get a raise, increase your savings rate. You don't have to save all of it, but the more the better.

7. LIVE WITHIN YOUR MEANS. Don't buy something if you don't need it. Monitor your daily spending and take pride in being frugal.

8. STAY DISCIPLINED. Set a long-term saving plan and do your best to stick with it. Every setback shouldn't mean you stop saving.