Mediaboss Marketing

By G.E. Miller, Guest Columnist

If you're in your twenties, every financial action you take -- from accumulating debt, to saving for retirement, minimizing your expenses, or even negotiating a lower rate on your mortgage -- is compounded over time.

No pressure.

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But really, it's not time for excuses or to claim ignorance. Decades later, all of those woulda, coulda, shoulda thoughts won't add up to a dime.

Here are three ways you can start to optimize your finances.

1. Get your employer's 401(k) match and max out for the win! There is no better time to stockpile savings for retirement than in your twenties, particularly if you do not have children or a mortgage to balance yet. The power of compound interest is something you can't cram for like a final exam when you're in your fifties or sixties. Once you lose time, the power of compound interest is gone forever (see the Kiplinger.com tool The Power of Boosting 401(k) Contributions).

Maxing out your 401(k) contribution is encouraged but not easy to do for most. At the very least, take full advantage of the 401(k) match that your employer is offering you. Most employers who match employee contributions do so at the rate of 50% or 100% up to a given amount. You could invest in the stock market for the next 70 years and never get a 50% or 100% return on your investment in a given year, but that is what you are effectively getting with your employer's match. Free money!

This year ratchet up your 401(k) contribution as much as you can comfortably stomach. For the first time in four years, the IRS will increase the maximum 401(k) contribution allowed by employees. The 2012 maximum 401(k) contributionincreases to $17,000, up $500 over the 2011 401(k) maximum contribution. The increase also extends to 403(b) and 457(b) plans. See Retirement Account Contribution Limits for more information

2. Grab the saver's credit (while you still can). The unsung hero of tax credits has to be the Saver's Credit (aka the Retirement Savings Contribution Credit). If you qualify, you're turning your back on free money if you don't contribute to an IRA. The government will pay you in the form of a tax credit of up to $1,000 for a retirement account contribution of $2,000. This credit, which lowers your tax bill dollar for dollar, is available to lower-income taxpayers (highly correlated to younger folks), so grab it while you can.

Continued here:
3 Ways for Twentysomethings to Get Ahead Financially