To kick off Financial Literacy Month, last week's column dealt with how parents can give young adults financial help without weakening their motivation. This week, I want to talk about what these young people can do themselves to build their financial strength.

Interestingly, a recent Young Adults & Money survey points out how timely this topic is. According to the survey, 52 percent of respondents between the ages of 23-28 consider "making better choices about money management" the single most important issue for individual Americans to act on today. Concerns about money management ranked higher than concerns about family relationships, the environment, and personal health and nutrition. It may seem surprising, but in light of the current economic meltdown, it really shouldn't be. The results demonstrate that this age group is clearly disturbed by our weakened economy and looking for concrete ways to avoid some of the financial problems they see all around them.

How Young Adults Rate Their Financial Physique

The survey suggests that when people in this age group look in their financial mirror, they don't particularly like what they see. Fewer than one in five consider their own financial physique to be "toned and fit." More than three in four describe themselves as financially "a little flabby" or "seriously out of shape."

This lack of financial fitness translates into a lack of preparation for life on their own. Consider that:

— 26 percent of survey respondents say they were surprised to learn how much money it takes to live independently;

— Only 51 percent are financially independent from their parents;

— Many admit that they don't feel adequately prepared to make good financial choices about using debt (28 percent), saving for the future (40 percent) or investing (43 percent).

Financial Moves To Make Right Now

Many of these young adults say they rely on their parents for ongoing financial advice. But a majority also say they want a step-by-step program to tone their financial muscles so they can carry their own weight. To me, financial fitness is a lot like physical fitness. If you want results, you have to make a personal commitment to change your habits and stick with a regular program. So for a young person who wants to get on track toward better financial health, here are my trainer tips. They're not sequential steps, but rather a series of moves that work together to create enduring financial strength.

1. Create a budget. If you don't have a written budget, create one and stick to it. If you need to cut back on expenses, start with all those "nice to-do's" like eating out, travel and entertainment. Better to use that extra money to build up a stash of cash (an emergency fund).

2. Build an emergency fund. Make sure you have enough to cover a minimum of three months of essential expenses — and keep this money easily accessible, like in an interest-bearing checking account or savings account. Depending on your job security and your other assets, you may want to have up to 12 months of expenses in reserve.

3. Stay on top of credit card debt. Pay it off every month if possible. If you're carrying a balance, think about ways to reduce your interest rate. For example, can you negotiate with your credit card company or transfer your balance to a card with a lower rate?

4. Start saving for retirement. Contribute to a company-sponsored 401(k) or other retirement plan if it's available. At least contribute enough to take full advantage of any employer match. Don't leave this "free" money on the table. Ideally, if you can start putting aside 10 percent of your yearly salary now, and keep saving at this rate throughout your working life, you should be in great shape when you reach retirement age. Remember, it's not only how much you have to invest, but also how long you have to invest that counts. Right now you have time on your side.

5. Protect yourself — and your finances — with adequate health insurance. Being young and healthy is no guarantee against an accident or unexpected illness, either of which could cost many thousands of dollars. Don't even think about neglecting this essential protection!

These five moves are a good starting point for anyone who wants to get back into financial shape. But there's so much more that can be done to build our collective financial strength. Parents, educators, employers and individuals — we all have a role to play in increasing financial literacy. The survey results provide positive motivation for all of us to get with the program. If people in their 20s are making responsible money management a priority, this could signal a new era of financial responsibility among Americans. And it's not a moment too soon.

Carrie Schwab Pomerantz is Chief Strategist, Consumer Education, Charles Schwab & Co., Inc., Member SIPC. You can e-mail Carrie at [email protected]. To find out more about Carrie Schwab Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.