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Young people entering the work force for the first time have a great opportunity to get a head start on reaching their financial goals. Instead of using the jump in disposable income to increase consumption, they can, for a time, continue to live a modest lifestyle and funnel the extra income into savings.

Most personal finance books recommend saving 10 per cent of your paycheque. However, the person joining the work force who is free of mortgage payments and family expenses can put aside 25 per cent or more of their income. Such high savings rates are not for everyone, but for people who attach a high priority to achieving financial independence, it can be the way to go.

Here are five tips for getting started in this direction. (See the full 10 tips online at


Keep on living like a student, or at home with mom and dad (but at least help with the household chores). Take the bus and subway, or bike and walk. "My best financial move was selling my car and living in a cheap apartment in a commercial-industrial zone of my city," says Brad Hurley, who lives in Montreal.


An influx of income can lead to frivolous spending. Stay disciplined. Notes Ed Rempel, partner in financial planning firm Ed Rempel & Associates: "Early in your career, you may be tempted to try to impress people with your new income. Stay frugal ... the book, The Millionaire Next Door, is true. The millionaires we meet are usually frugal people."


The fluctuations in the stock market may catch the eye of a young person as a route to fast riches. But they should first try out their ideas in a practice account at an online discount broker or through a stock-market simulator. The lessons to be learned will be much less costly.


Consider delaying marriage or children to extend the period of aggressive saving. Kids and a house are major financial commitments and putting aside funds will be a challenge afterward. Progress toward financial goals will slow.


Once an emergency fund has been set up and some headway made on paying down student and other debt, savings can be directed toward the purchase of a car, house, and other items. Don't rush the purchases: the longer savings are accumulated, the smaller the loan needed to buy what you want - which means bigger savings on the interest payments.