The Best Money Tips for 20-Somethings

October 29, 2013 | | U.S. News & World Report |

Back in 2008, before we were familiar with the terms "Great Recession" and "subprime mortgage crisis," U.S. News asked top money experts to share their advice for 20-somethings at the time. Even back then, young people found it difficult to land well-paying jobs and pay off their student loan debts. The advice that money experts offered still holds true today, on the other side of that recession.

Here's that roadmap, broken down by financial categories:

Spending. First jobs come with unavoidable start-up costs, such as a new suit and possibly wheels to match. Those expenses can easily overpower a starting salary. That's why Liz Weston, author of "The 10 Commandments of Money," recommends pretending that your new salary doesn't exist. "Most people would be better off if they continued to live like broke college students for a few years, until they get a handle on expenses," she says.

"Diminish your expectations," advises Tamara Draut, author of "Strapped." Small things such as bringing your lunch, buying coffee at a deli instead of a coffee shop and waiting to buy a new car can make a big difference, she says. Living at home for a few months after graduation can also provide financial breathing room, Draut adds. [...]

Student loans. "Don't worry about student loan debt too much," Weston says, unless it's dominated by high-interest private loans. As long as most of it is locked in at lower rates, 20-somethings are better off putting their extra cash into high-yield savings accounts or retirement savings. Another advantage of student loans is that they tend to be flexible; loan companies may grant deferrals or forbearance to struggling borrowers going through temporary crunches, Weston adds. (Deferring doesn't stop interest from piling on more debt, so it's an option best reserved for emergencies.)

Paying late or missing payments altogether should be avoided at all costs, Draut cautions. Unless a borrower officially requests and receives a deferment or forbearance from the lender, missed payments can hurt your credit score.