Jim and Melissa Schultz are getting a jump-start on their future. Married nearly a year ago, they skipped the newlywed apartment stage and sprinted straight into home ownership -- complete with two bedrooms, one bath and a dog. The twentysomethings had both lived with their parents before getting married and saved enough between them for a down payment on a house in move-in condition in a nice neighborhood. "I couldn't see paying rent and throwing it away every month," says Melissa.

The young couple would eventually like to add a deck and finish the basement, but they plan to pay for improvements as they go -- no financing options. This no-nonsense attitude extends to budgeting. "We go out on weekends and have fun," says Melissa. "But," Jim adds, "we make sure the bills are paid first."

Building Protection Today
Melissa, who already had auto coverage with MetLife Auto & Home, contacted local agent Steve Botwick as the couple prepared to buy their home. After setting up a homeowners policy (plus special scheduled coverage for Melissa's engagement ring), the three discussed additional protection. "Being in the mortgage business, Melissa knew what responsibilities might be left behind if anything should happen to one or the other," Steve says. "As a young couple, their biggest need was to make sure that the mortgage would be covered."

Knowing the newlyweds were on a tight budget, Steve suggested term life insurance. It was an affordable way to provide sufficient funds to pay off the mortgage, plus cover final expenses and an adjustment period. Meanwhile, for unexpected emergencies like an illness or job loss, Jim and Melissa have some savings set aside. "I like to see clients have enough savings to cover six to eight months of living expenses," Steve says.

The Long View
Reid Hansen, a MetLife financial planner, agrees with Steve that step one should be to establish an emergency fund. He recommends looking into a CD or money market account, such as those available at competitive rates through MetLife Bank. Then for retirement, he encourages clients to take early advantage of tax-advantaged plans such as a 401(k) or IRA and contribute at least the amount that will earn an employer match.

Melissa already participates in her company's 401(k), setting aside 8% of her salary. Jim will soon be eligible for his employer's plan and also has a 401(k) with a former employer.

"Jim may be able to leave that money in place or roll it into his new employer's plan if he's happy with the investment options offered," Reid says. "Or he can transfer the money directly into a Rollover IRA. The important thing is to resist the temptation to take the money out. He needs to let it continue to grow in a tax-advantaged account.

"Starting to invest in their 20s means Jim and Melissa can count on the benefits of compounding to play a big role in reaching their retirement goals. They don't have to save as much as if they had started later."