When you're young and just starting out, it would be wise to set up automatic deductions from your paycheck. Besides contributing to your 401(k), many payroll departments will allow you to channel money from your paycheck to other accounts, including savings accounts.

So why would you want to do that you may ask? For one, you would be automatically saving. And because you don't actually have the money in your hands, you insure that it will go toward savings and not something else. Then, when you really need the money, it's there. It will help get you in the habit of automatically saving and pretty soon you won't even miss the money from your paycheck. Hopefully you'll completely forget about that savings account until you really need it.

Check with your payroll department to see if you can set this up.

I think it's important to make sure you put enough away for a rainy day, but I think often times many people over do it (by saving too much or spending too much). Life isn't always about saving for the future, it's about living too. There's a fine line between living life and saving money like a miser. It's important to find this line while you're young. Save enough to feel secure, but live enough so you have little regret. Contribute to your retirement, whether it's a Roth IRA and/or 401(k), etc. Build up an emergency fund and only spend within your means. Save up for entertainment and then enjoy life. Just don't over do it with spending and don't use credit cards if you can't pay them off each month. It's really pretty simple; save enough to be happy and spend just enough to be happy. Here are some steps:

1. Get a job, or two
   
2. Build emergency fund, about $2000 to start. Put in high interest savings account and try not to touch it for anything but emergencies
   
3. Contribute as much as you can to a 401(k) at work, at least 10% if possible
4. Start a Roth IRA and contribute the max each year, refer here
5. Save entertainment fund and use for fun
6. Don't rely on credit cards
   

I've been an ING Orange savings account holder since September '07. They may not offer the best rate for an online savings account, but overall I'm happy with the site's ease of use. When I initially signed up, I contacted a random stranger offering a link for a sign up bonus of $25. When I funded my account with $250 or more, I got $25 added to my account and he made $10. Not a bad deal. So, if you're interested in signing up with ING Direct, please send me an email at slapdash.blog@gmail.com and I'll send you a referral and we can both win!