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There's an unusual fear of credit cards in America -- mostly because people don't know how to use them and end up getting in tons of debt. Look, some credit cards offer huge consumer advantages like automatic extended warranties for anything you buy (like your phone) and rewards like free airline miles. I use my credit card to pay for virtually everything I can -- and then set up an automatic payment each month.
First, if you have debt, pay it off as quickly as possible. Then don't be afraid to have one or two credit cards and use them, paying them off each month in full. This builds your credit, which will save you tens of thousands of dollars when you buy a car and home.
Make sure you have a no-minimum, no-fee, high-interest account and that you're not paying any fees for your checking account. If you get caught paying a checking fee, switch to a no-fee account. They are available at many financial institutions, so ask if yours offers one.
Don't worry about putting money in it yet -- just open an investment account. If your employer offers a 401(k), make sure you're participating, especially if they offer a 401(k) match. Also, open up a separate investing account for your Roth IRA.
I have a friend who dines out more than the average person. He works hard, and before spending all that money, he maxes out his investment options and consciously chooses what he values. Compare this to most of us, who look at our bills at the end of the month and shrug, saying, "I guess I spent that much." When you spend consciously, you can afford to pay more for the things you love -- but you have to cut costs mercilessly on the things you don't. You love jeans? Sure, buy that new $200 pair. But if you don't care about your TV, stick with your old crappy one rather than replacing it with HD newness.
Sit down and sketch out the major costs you'll encounter in the next five years. Think about a car, a down payment on a house, a wedding, insurance or maybe even kids. Then set up savings goals for each in your savings account. For example, according to the American Research Group, Americans spend over $800 on Christmas gifts. If you wait until the last minute, you'll have to come up with $800 cash. But if you start saving in January, you only need to save $67 per month. Apply the same thinking to things like your car, your wedding (even if you're not engaged) and your first down payment.
Nobody wants to manage money manually, so I recommend setting up an automatic system to handle your monthly payments. If you have a 401(k), ask your HR person to automatically take money out of your paycheck to fund it each month. Treat your checking account like your email inbox -- everything goes there first. Automatically transfer money to your savings and Roth IRA each month. Set up auto-pay on your credit card and any other consistent bills you have.
Follow the Hierarchy of Investing: First, if your employer matches your 401(k), contribute as much as possible to get the full match. This is free money! Next, pay off any debt you have. Third, contribute as much as possible (as allowed) to your Roth IRA. If you still have money left over, go back to your 401(k) and contribute as much as you can.
Most people think "investing" means "picking stocks." Wrong. For most investors, it would be a good idea to consider low-cost index funds, rather than stocks. Index funds require lower fees and maintenance than stocks, and are far more stable. I like lifecycle funds (also called target-date funds), which allow you to pick your age and then handle the rest for you. Don't try to guess where the stock market is going or which stocks will do well -- even actively managed funds fail to beat the market at least 68 percent of the time, according to S&P's. You can probably do better by buying into low-cost funds and automatically investing money (shoot for at least $100/month).