1. Run the Numbers
Do you know how big a nest egg you'll need down the road? Four out of ten millennials are unable to estimate the amount they'll require to live comfortably, according to a recent Wells Fargo study. Check out the retirement calculator at BankRate.com and plug in your particulars to come up with a concrete figure. Then invest the money ASAP. Sure, you have other expenses to deal with—child care, preschool tuition—but the earlier you start, the more it becomes a lifelong habit, says Farnoosh Torabi, Moms Money Clinic advisor and host of the So Money podcast.
2. Let the Company Help Out
If your employer offers a 401(k) plan match—typically 50 percent of the first 6 percent you put in—make sure you contribute enough to get all of it. Of course, if you can afford it, you should set aside more. Aim to save at least 10 percent of your gross income. If you can't manage that, put in what you can and bump up your rate by 1 percent every year. Don't bank on pension plans: They are far less generous than they used to be, and the number of large companies offering them has declined by 60 percent since 1998, according to the human-resources consulting firm Towers Watson.
3. Weigh Your IRA Options
If you don't have access to a 401(k) plan, your next-best options are a traditional Individual Retirement Account (IRA) or a Roth IRA. "Most millennials aren't making enough to need the pretax advantage of a traditional IRA, so a Roth IRA may be a better choice," says Ellie Kay, Moms Money Clinic advisor and author of Living Rich for Less. Note: Even if you aren't currently earning any income, your spouse can contribute up to $5,500 annually to your retirement account (and vice versa), as long as you file jointly.
4. Attack Debt
Every dollar you spend on interest payments means less money you can invest toward your retirement. If you have significant high-interest debt (such as from revolving credit-card balances), whittle it down before ramping up retirement savings since the percentage you pay can easily cancel out investment gains. "Prioritizing debt might mean changing jobs or doing something on the side to earn extra money," says Torabi, who freelanced and babysat to pay off her student loans and credit cards. You might also try snowballing your debt—that is, paying off your smallest balance first and then reallocating toward the next-largest number. Wiping debt off the books now makes it a lot easier to save for later.
5. Maintain Your Rainy-Day Fund
If you don't already have six months' worth of emergency living expenses, build it up now. Having this cushion enables you to keep your retirement savings plan on track when an unexpected bill or expense comes along, says Torabi.
6. Keep Your Costs Down
Got a raise? Great. But don't upgrade your lifestyle. "A bump in pay can entice you to move to a nicer place or buy a new car," Kay says. "A better approach is to stay where you are, keep driving your old vehicle, and invest the money for retirement."
7. Put College Last
Yes, rising higher-education costs are a concern—and another area where a head start makes a huge difference. Still, you can always borrow money for college (not to mention apply for financial aid); the same isn't true of your retirement.