Tips on making the most of your money

Tips on making the most of your money »Play Video
SEATTLE -- In these tough economic times, many people are wondering how to make the most of their money.

Jane Bryant Quinn is one this country's top experts on personal finance. In her new book Making the Most of Your Money Now, Quinn tackles the most pressing financial concern for most of us today, namely bouncing backing back from the recession.

Quinn says the first thing you should do is to get organized.

"It's kind of a start-again thing. You know, pretend you're 21, and say, 'OK, what have I got? You know, what are my savings? What are my debts? What is the outlook for employment?'

"Just put it all on a table, and say, 'This is my situation? How do I go ahead from here? What are my priorities?' So I say figure out what your base is, and start going after your problems, the first one being consumer debt and the second one, of course, being saving more money," Quinn said.

Quinn says making a budget make a significant difference.

"Absolutely. It makes a huge difference, especially if you haven't been able to control your spending" she said, adding she is, and always has been a big fan of automatic savings.

"Because people who live paycheck to paycheck say, 'I can't possibly save any money.' But the truth is, if they took 5 percent off the top of their paycheck, and had it put in a retirement account, they would live just the way they did before. And they would have no idea what they didn't buy because that 5 percent went away, but suddenly they'd be saving money," she said.

If your employer offers a 401(k), join it, Quinn says. And if not, open up a retirement account on your own.

"Start with 5 percent. Move to 7 percent. Move to 10 percent. By your 30s, you should be saving 15 percent," she said.

Quinn urges young people to learn from the latest recession, and take advantage of the time they have.

"Look at what has happened to people - 55, 60 - who, in this terrible economy, were suddenly forced to retire, much earlier than they expected. They haven't saved money. Age discrimination means it's much harder to get a job when you're older - I mean, that's just a fact of life. And so if they haven't saved enough and now their savings are down, what are they going to have to do?

"They're going to have to drastically reduce their standard of living. Because you come up against a wall. And if you haven't saved enough money, you're cooked. I mean, there's no magic wand. There's no fairy that's going to come and all of a sudden create a mountain of gold for you," she said.

Young people should look ahead and make sure they meet certain financial goals, Quinn says.

"(They should say) 'I can't have consumer debt by the time I'm 55 -- Too dangerous. I want to pay down my house if I own my house, pay my mortgage.' The old rule is to enter retirement with a paid-up house."