smart spending

9 financial tips for Generation Y

5. Get insured

You're not invincible. Moreover, given that one illness or injury can bankrupt you, health insurance is a must. If you can get it through your employer, consider it. It's usually a better deal than options available to individuals.

You'll also want disability insurance in case an illness or injury keeps you out of work for some period of time. "The probability is low, but the impact is severe," says Todd Katz, senior vice president with MetLife.

Homeowners or renters insurance is smart. Even if your furnishings are castoffs, replacing everything would add up.

Finally, if others depend on your income or if family members would need to hire someone to cover the work you do at home, life insurance is a must.

6. Consider housing options

Your living arrangements need to be safe, inexpensive enough that you can build your savings and flexible enough that you can move if your career demands it.

One option is to head back to your parents' home for a year or two. "If you can grin and bear it, it's a great way to get a financial buffer quickly," Moss says. Of course, you need to be disciplined about stashing away the money you're not spending on rent.

Renting an apartment with roommates helps you stretch your housing budget and learn to live with someone else. That's good preparation for marriage, says Fisher.

7. Budget

While major outlays are hard to overlook, you also need to track smaller, ongoing expenses, like lunch money and gas for the car. These add up, and the totals can shock you.

Consider that a modest dinner out each week at $30 will leave you $1,560 poorer by next year. If you find number crunching tedious, check out online tools that can automate the process.

8. Have the money talk

Sure, discussing money with your significant other isn't the most romantic of conversations. But it's better to find out now if your future better half is hiding thousands in debt. "Ask the questions that might be uncomfortable," says William Bailey, associate professor in the School of Human Environmental Sciences at the University of Arkansas at Fayetteville.

9. Prepare before starting a family

It sounds crass to consider finances when you're thinking of starting a family, but you need to be realistic. Cut corners all you can, but kids are expensive. In addition to the gear you'll need, a baby typically means some time away from work. Start putting some money away before you're knee-deep in diapers and Onesies.

While the economy has been hard on almost everyone, you have a few things in your favor. First, you have time for the market to recover. Moreover, you should be able to halt any bad financial habits before they become ingrained.

Of course, the economy will change at some point. Even so, the key to financial security remains the same, according to Kamenetz: "Live within your means and put something away."

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