Young adults who are just out of college or a few years into their careers are in an ideal position to secure a solid financial future. This article lists five specific steps that any young professional should take before age 30, when he or she still has relatively few obligations and can set up a solid plan for meeting his or her long-term goals.

As a young professional, you probably have certain long-term goals in mind. You may want to start a family, settle into a home, or travel around the world. Reaching your goals takes planning, and you most likely know the basics of being financially literate. You know how to track your income and expenses over time to get an accurate picture of your finances, and then set up and follow a simple budget based on your lifestyle.

In addition to having this basic fiscal knowledge, there are some concrete steps that you can (and should) take before the age of 30 to build a solid financial foundation. Here are five suggestions to get you started.

1.    If you’re currently working, talk with your human resources manager about pensions and other savings options. Don’t rely on a pension alone, however, because fewer companies are offering them these days. Enroll in your employer’s 401(k) or 403(b) plan and, if your employer matches your contributions, be sure to allocate enough to meet their maximum. When a 401(k) plan is not available, consider IRAs, Roth IRAs, and other stock retirement accounts. If you’re just starting out and don’t have large family obligations yet, then your automatic contributions aren’t likely to be missed, and you’ll be on the road to a successful savings plan. The earlier you begin saving, the larger your nest egg can grow.

2.   Choose checking and savings accounts that earn interest, and don’t pay penalty fees, for using other banks’ ATMs, for instance. Set up accounts that offer overdraft protection and that help you avoid late fees. If your bank doesn’t offer checking accounts with interest and at least three percent interest on your savings accounts, then you should investigate online checking and savings options.

3.   Use your credit cards responsibly. Try to avoid debt and pay with cash whenever possible. Better yet, use your credit card only in an emergency. You can establish good credit by staying out of debt and paying your bills on time. Compare the interest rates and fees among different credit cards. Establishing a good credit score now can help with later purchases and loan applications.

4.   Set up and maintain an emergency fund to deal with unforeseen expenses that could arise, such as medical costs, car trouble, and possible periods of unemployment. Ideally, you should have a minimum of three to six months worth of funds available, and some financial planning experts recommend eight months. As you earn more, you can allocate a higher percentage of your income, which can yield greater savings than sticking to a specific dollar figure.

5.   Choose the right type of insurance. You’ll find that most life insurance plans are inexpensive, with term life insurance generally being cheaper than whole life plans. However, many whole life insurance policies have “living benefits” available; that is, you have access to certain funds without having to wait for death benefits to take effect. After assessing your personal needs, you should compare the different plans. Remember to apply for health and disability benefits, as well, especially if you have a family.

It’s never too early to begin planning for your retirement and starting a savings plan. You’ll be less likely to panic when unforeseen expenses show up, which would otherwise have you scrambling to borrow money or charging your way into debt. Taking the above steps by the time you reach age 30 can give you peace of mind and the confidence to pursue your financial goals.

About the author: Guest post written by freelance financial writer Liz Goldman and brought to you by Wonga – the payday loan experts.