FORMER United States president Theodore Roosevelt said: “Old age is like everything else. To make a success of it, you’ve got to start young.”

Those in their 20s need to plan their finances early. This is the stage when commitments are low, so they need to get their discipline right. Here are some tips:

START saving early. Save at least 10 per cent of your income. By the 10th month, you will save one month’s income. By the 20th month, you will have two months’ salary. You are building an emergency fund. An illness or a job loss can be devastating if you don’t have savings. Save three to six months’ expenses. Start a habit of saving the green notes, the RM5. Each time you receive a green note, save it. As you go on, you can upgrade to saving the red or orange notes.

CREATE financial goals. A plan and budget will guide you better. Some examples: marriage fund, home fund, car fund, fund for settling debt, emergency fund, education fund or retirement.

HEALTH insurance is a must, even if you are in perfect health. If anything were to happen, you can rest assured that you are covered and your financial goals will not be derailed. Buy it while you are young and healthy.

IDENTIFY wants and needs. Get your priorities right. Spend on the needs first. If you have enough left after saving, only then may you go for the wants.

RESIST using credit cards. Too many credit card users are making minimum payments. This is not a good habit as credit card interests are excessive. You will end up paying more interest, creating a snowball effect of greater debt. Pay it off as soon as you can. Use debit cards instead.

BUY a car within your budget.

A WEDDING is an important, once-in-a-lifetime event, but should be affordable for your situation. Do not spend lavishly.

SAVE for retirement. Start saving early. Retirement is a long way to go, why start so young? The answer is compounding, or the ability of your money to grow over time. Even if you do not have a lot to save, you have time on your side. Those savings and investments will earn you interest, dividends and capital gains.