Pare Down Debt. Make your most expensive debt the priority. If it’s a credit card, stop using it, ask for a rate reduction and make more than the minimum payment. Then, move to the next item on the list. (You’ll likely save more paying off high-interest debt than investing.)
Save for Retirement. Some of the best retirement savings are your 401(k) contributions at work; you get immediate tax breaks on what you put in, and there’s often an employer match. Outside of work, IRAs also have nice benefits. Work to save 10 to 15 percent of your income (20 percent if you’re 40 or older).
Start an Emergency Fund. Six months of savings can help you through a job loss or another unexpected event. Set up a direct deposit to siphon a bit of each paycheck into savings. Then look for ways to uncover extra cash: Turn down thermostats, ask colleagues to carpool and make your own morning cup of Joe.
Save for College. First come kids, then come fears about college costs. Your best bet to start saving is a 529 plan; your investment grows tax-deferred, and withdrawals also escape taxes if the funds are used for tuition and related expenses. The best part: Grandma or Grandpa can even chip in.
Review Insurance. Ask your agent to identify gaps in your health, car and home or renters policies, and about ways to trim costs (discounts, premium reductions or savings for keeping more than one policy with the same company). Other insurance to consider: Long-term care (for nursing home and at-home care) and life insurance (to prevent hardships on loved ones).