"Choose wealth instead of status," Ray writes. "Example: Pay $5,000 cash for an older car and have no payments vs. buying a $25,000 car and having payments of $466/month ($5,600/year) for five years. Without the payment, you can save $466/month for five years. Investing $5,600/year into your 401(k) (at a 10 percent rate of return) over five years would be worth $38,156.

"I'd rather be wealthy than look wealthy."

Along those same lines, Ray recommends that you pay off all of your consumer debt and make a commitment not to use credit to purchase anything that will depreciate, such as cars, furniture, technology, vacations, clothes, etc.

Next, start saving 10 percent toward retirement and 5 percent toward items you will need to purchase over the next year, like a new sofa or snazzy Apple laptop.

"For retirement, I would recommend a Roth IRA or Roth 401(k) while people are in lower tax brackets, and to buy a diversified portfolio of no-load mutual funds," Ray writes.

"Once short-term reserves and spending goals are covered and you have no consumer debt, then begin saving 15 percent of your income into retirement accounts."

When it comes to long-term investments, Ray writes, you should consider when your money is going to be spent.

"Money that you will likely spend over the next one to two years should be kept in a money market," he wrote. "Money that may be spent over the next three to seven years should be invested in bonds. And money that won't be spent for eight-plus years should be invested in stocks. With younger investors this approach means investing 100 percent of their long-term money in stocks/stock mutual funds."

I hope this helps, Elle. You're an excellent example of someone who is wisely developing good saving habits while young. I'm sure it will pay off for you in the future.

For more information about Ray, his book on baby boomers and some nifty financial calculators, go to networthadvice.com. Or, if you have a financial question for me, send it to gkratz@desnews.com or the Deseret Morning News, P.O. Box 1257, Salt Lake City, UT 84110.

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E-mail: gkratz@desnews.com