An essential aspect of your financial life is spending less than you earn. So, “pay yourself first” by saving before spending on everything else that life demands.

For example, saving 10% of your total salary means you’ll become a multimillionaire (two million) by age 69. If you’re able to sock away 20%, you’ll hit that magic number at age 60. Saving 30% of your salary, you’ll be in the multimillions at the young age of 55. Everyone has a balance between enjoying life today and financial freedom in the future. Find yours!

Assumptions: A starting salary of $40,000 at age 23 that grows 3% a year, and you invest 100% in stocks that earn 7% a year.

After saving enough in your 401(k) to earn your employer’s match, we think the best place to save for your retirement is in a Roth IRA. Of course, you pay tax on your contributions, but it’s best to do it earlier in your career before your salary grows and you move into a higher tax bracket. Most people can contribute up to $7,000 per year to a Roth account. Make that a priority!

You’re young and have your entire career to save and invest wisely. If you have decades before you need money for retirement, do what you can to be a long-term investor that focuses on being a business owner. That is, owning stocks. We believe that’s the best way to compound wealth over the long haul, and it’s likely your investments for retirement can be in 100% stocks. Ignore the ups and downs of the market and instead focus on saving consistently, year in and year out. You won’t regret it!

Get your relationship with money off to a good start! Some best practices we’ve found:

• Spend less than you earn each month. That will allow you to build up some extra savings (we’d suggest a goal of six months of your spending) to deal with life’s unexpected costs.
• Pay off your credit cards each month. If that’s not working, use a debit card instead and devise a pay-off plan for your credit cards.

Just like you avoid spending on frivolous things, avoid financial products like universal or whole-life policies that combine investing, savings, and life insurance. You’ll often find you’re paying too much and can build those benefits yourself through fixed-term life insurance and investing separately.

Many in the financial industry earn commissions or incentives by selling “suitable” products. Unfortunately, that’s not good enough. Instead, find a financial partner you can trust that acts in your best interest 100% of the time. That’s called being a fiduciary. They can help you develop a financial plan and stay on track!