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Question: I am 22. I have no debt. I currently have 6500.00 in savings & add about 300 a month to this account. I want to make my savings "work for me". What steps should I take ?? I want to start practicing good money habits now...please help. Christina. Conway, MA.

Answer: You're already doing better than many (most?) people. You're saving, and you want to learn more. That's a terrific combination.

What I especially like is your phrase "practicing good money habits." It's so easy to get lost in the technical and financial complexities of managing money when what really counts as sound personal finance is developing a handful of good habits. That means save for retirement in a tax sheltered pension plan with a well-diversified portfolio. Build up with automatic withdrawals from your checking account a nest egg that can be used for everything from surviving a layoff to putting a down payment on a home. Own your own home. Don't take on credit card debt. Keep good financial records. Insure your loved ones. Keep it simple, always.

Of course, managing money easily gets much more intricate. For instance, does it make sense to open up a Roth-IRA (it usually does) to the advisability of purchasing a variable annuity contract (the answer is no for most people). Still, the essence of good money management is good habits.

To learn more, there are two books I've recommended before that offer plenty of insight and wisdom. They also have the virtue of being short. The Only Investment Guide You'll Ever Need, by Andrew Tobias. It came out decades ago--1978. But it has been revised many times since then. Tobias is an entertaining storyteller. I'm also a big fan of Burton Malkiel's The Random Walk Guide to Investing: Ten Rules for Financial Success.

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