The Twentysomething's Guide to Money

When you don’t have a lot of money, it’s even harder to decide what to do with it.

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Most people get health insurance through their employer. If that's not an option, Ulrich recommends looking for a high-deductible plan, sometimes known as catastrophic insurance, to guard against major unexpected expenses. (Trips to the doctor or emergency room will cost more, but there is a cap.)

Long-term goals. Financial dreams—such as retiring early, buying a house, or traveling around the world—need not be put on hold for decades. But to make them a reality before middle age, they may need to be slightly massaged. For example, workers in many urban areas may find that homes downtown are unaffordable, but a place in the suburbs can be within reach, Ulrich says. "You have to alter your plan."

Retirement. Saving for retirement—another long-term goal—can also be temporarily deferred. While workers should try to take advantage of matching employer contributions to 401(k) and similar plans, saving above and beyond the level covered by the match can be nearly impossible for stretched entry-level workers. Still, Weston says young people should get in the habit of saving from their first paycheck: "You have the power of time behind you now."

Fidelity, which offers lifecycle, or target-date, funds that shift into less risky investments as workers grow older, recommends saving 12 to 15 percent of gross pretax pay each year. If employees start at age 25, they can replace 85 percent of their working income in retirement, the company estimates.

If that sounds daunting, consider Ulrich's view that today's youth may not be as financially well off as their parents' generation, but they're also living much fuller lives. "Not materially, but in terms of access to information, education, careers ... We have to hearten ourselves with that."

Kimberly Palmer (@alphaconsumer) is the author of the book Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back.