American Millennials have the highest student loan debt and the worst savings rate in U.S. history. So, youths, here’s what I have learned from a year of taking my savings/investments from close to $0 to close to $12K, taking my credit score from about a 600 to 720 and keeping debt levels needed to build positive credit history after trashing it:

1) It is never too soon to start saving, and no amount is too small to start.

2) “Pay down your debt before you start saving!” is really bad advice. If you have small amounts of debt, this could make sense, but if you have large amounts of debt, it is much safer for you to build three to six months of emergency funds in liquid assets in order to pay the immediate bills, than pay down even a significant portion of your debt, only to lose your job, or have a major calamity, and have to charge your debt right back up again. Debt can be forgiven, settled, reduced, extended, refinanced etc. But cold hard cash won’t magically appear when you need it.

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3) Yes, Virginia, you too, can successfully invest in the stock and bond markets, and make a consistent, if tiny, return over time, if you invest in low-risk, low-yield ETFs and mutual funds from Vanguard. Ignore the up and down of the stock market, look to your quarterly dividends and the overall trend of the fund. Years like 2008 are rare, and overall growth has not been impeded in the markets, even if you take into account the Great Depression. It just means weathering the dips and recognising, dude, you’re 35~40 years from retirement, you’ve got plenty of time. There is no get-rich-quick, but there is get-comfortable-slowly.

4) Don’t settle for the terms you were initially offered on anything. A loan, a credit card, even an employment contract, etc. Always be willing to walk away towards something better unless terms get better for you over time. Even credit cards or loans can be refinanced or moved to a different lender. With employment, don’t quit or threaten to quit, but keep track of your requests, increase your urgency, and eventually quietly start looking at other opportunities.

5) Cutting spending, in the sense of removing items or services upon which our habits are built, is a lie for most people. Most people, as much as I love him, are not Mr. Money Moustache, but we can still learn a lot from him. We can celebrate the few who can do it because most of us can’t. The trick is not in changing the habits of what you spend on, the trick is in optimising how you spend. Reduce, sure, but recognise that we are creatures of habit, and making your habits cheaper or more rewarding is a lot easier to accomplish than cutting habits out of your life. Everyone is different. It’s easier for me to reduce utility usage than it is to stop going to the corner store for a Red Bull. Knowing that helps me use my habits to optimise spending and saving rather than unsuccessfully attempt to drop a habit. For many people, dropping their StarBucks habit is easier than cutting electricity. We’re all different. Know your habits.

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6) Loyalty programs only work if you really are loyal, and if they work with your habits. Most point cards and loyalty programs do not work for me because I make purchases, especially large purchases, only rarely. Bonuses never work out for me. Programs for airlines only make sense if you commit to one airline, at least initially. For me, that’s Delta, but if I hadn’t had personal reasons for avoiding them, there are better earners, like American and United. But I know that my habits will get me further with Delta now than trying to jump around again, even if Delta doesn’t offer the most or the best.

Store programs only work if they are a part of your habits, either personal or business. I find the only two programs benefiting me in Japan (where every store has a point card) are T-Point (accepted at FamilyMart, my corner store, as well as SoftBank, my cell phone carrier, and at Yahoo shopping, where I buy KOR stuff, and at Eneos where I always buy my gas), and Autobacs (because I do buy a lot of car related stuff, for obvious reasons). Autobacs now also takes T-Point, so I am going to spend my current Autobacs points, and from now on, put even that onto T-point. Only join programs where you’d be spending money even if there was no program, and always see if there are ways to move your purchasing habits towards substitutes or even the same products where your program works.

Likewise, only get a loyalty based credit card (cashback, points, miles) if it will help offset your spending. Never look at such credit cards as opportunities to get into more debt. You’re looking to get more out of your current spending or reduce your spending via your rewards. You’ll wipe out the value of any rewards or bonuses with interest charges if you look at your new credit lines and think it means you can increase your spending. If that’s something you might really be tempted to do, do not even bother. Wait until you have more maturity or self-control. I didn’t have that kind of self-control until I was 28. I certainly did not have it at 22 or 25. That’s nothing to be ashamed of, but it’s something to know and accept, if you can.

7) All of this advice is good, but whether it’s putting money into savings and investments, or reducing debt, or optimising spending, or rebuilding your credit the two most important factors (next to, you, know, paying at least minimum balances if not full balances on time, every time, ALWAYS), are time and increased income. In that order. Time heals all wounds, time allows you to argue for better terms, and time will make your money grow and rewards to accumulate. An increase in income allows you to pay down debt faster, contribute to savings, investments, and retirement funds faster, and allow you more flexibility in general when you’re working with cash.

8) MONEY IS NOT FOR SPENDING. MONEY IS FOR FREEDOM. If I could just impress one thing on whomever will listen, it is the idea that points, miles, yen, dollars... whatever liquid assets you’re talking about, they’re best all thought of as “freedom points.” The freedom to take a trip because you can and it won’t hurt you, the freedom to go back to school or get extra training, because you can and it won’t hurt you, the freedom to move if you need to take a better job, the freedom to walk away from bad terms or bad contracts, and most importantly of all, the freedom to look your boss in the eye and say, “No, sir. I will not do it it. You’ll have my resignation on your desk by the close of business.”

Yes, we spend, and we spend because we have to, and we spend because we want to, but understand that money’s greatest power is freedom. Is the spending you do now worth the freedom you might give up later for those same points? If the answer is yes, because it helps you reduce stress, maintain happiness, etc, GO FOR IT. If not, put those freedom points to work making more freedom points. 80 year old you will thank you for it.