A lot of people who are between 20 and 30 years old don’t think about their retirement, which is actually a big mistake. Most 20 year olds are stuck with student loans and credit debts which they use as an excuse to not save up for their retirement; however, there are still ways for you to allocate to your retirement nest without sacrificing other things.

1. Understand the importance of your retirement fund. It would be more difficult for you to start saving for your retirement if you don’t truly understand the need for it. You have to have an exact idea of what you want to achieve. There’s no need to panic for this because you still have enough time to save; the important thing is to understand it early to be able to make a plan that would fit the situation that you’re in and to accomplish each step properly. Don’t be intimidated with the amount that you come up with, keep in mind that it is a long term project and that it’s not something you have to finish all at once.

2. Priorities. You have to work on the important things first and an emergency fund is one of it. Whether the emergency is car trouble, sudden job loss or even medical emergencies, an emergency fund will serve as your safety net. A $ 1000 is not a bad goal and starting out small is way better than not saving at an early point at all. The rule of thumb is to have an emergency fund that is worth 3 to 6 months of your salary. But if you are having trouble with saving money, you might as well pay off you high interest debt first. Credit card debts and student loans are just some examples. If you don’t finish off these loans, it will continuously grow and you may have a hard time paying it off in the future. These debts can make you spend thousands of dollars so it is best to finish them first.

3. If you’re current job is offering you a 401(k) plan, it is a good idea to start contributing to it even if you can only contribute a small amount and even if you think you won’t stay with your job that long or don’t get a match from your employer. The reason for this is that you won’t even know that you’re money has gone to your account since it will be deducted automatically from your paycheck. Saving early will also give you a boost in the long run.

4. You have probably thought about opening your own Roth IRA account because of the offer tax deferred growth. Contributing to this will help you pay less and even get more as soon as you file your annual taxes and the good thing about this is that you can make early withdrawals without paying for a penalty.

5. Take care of your credit score. Your credit score can do a lot of things for you in the future if taken care of. Monitor your credit score regularly and pay off your bills on time to avoid getting marks on your credit report. You will get lower interest rates and better deals in the future if your credit history is in good shape.

Retirement planning is very important but it’s not something you should stress out about. It is however advisable to start on it early, but then again, it is a long term project and you have time to work on it for the next following years. Just be patient and make sure you put your priorities first so that you won’tbe troubled with your finances in the future.