Single & free: lay the foundation for your financial future while you are relatively free of obligations.

LIKE MANY YOUNG WOMEN, CHIRI HOLT ENJOYED LIVING THE SINGLE LIFE. WITH A LAW DEGREE in hand and no children to care for, she spent her income on dining and shopping, leaving little else for savings. But the 28 year old quickly learned that flying solo also has its own set of long-term financial circumstances to consider.

In 2001, Holt. was working in Houston as a legal assistant for an estate planning attorney, many of whose clients were preparing for retirement. They had large retirement funds, built up over time through diligent saving and investing. In fact, one individual, she recalls, had grossed approximately $1 million in savings. That's when her eyes began to open. Seeing that "helped me understand that how they spent and saved made a big difference in the long run because they understood money and what to do with it," Holt says. "I want to have the best care when I retire but I realized I hadn't been saving my money." That was the turning point for Holt, who had the destructive behavior of spending money as fast as she earned it.

As an undergraduate, she amassed $1,000 in credit card debt. In law school, she spent $100 out of her $300 weekly pay as a sales associate to buy clothes. "I was never told about money or saving, that's why it didn't come naturally," she says. "I would spend my money knowing I would get more, and as long as I didn't ask my mother for money, she didn't tell rue about saving," she says.

Soon after law school, she headed back to her hometown of Detroit and went into private practice. She was determined to get her finances straight, but dining at restaurants and shopping quickly consumed her income again. "Once I got a taste of making more money, it got out of control," she says, "I knew I needed help. Time just kept passing away and I had to wonder, 'What have I done with my money?'"

In May, Holt met with Jimmy C.B. Taylor, a CPA with AXA Advisors in nearby Southfield, Michigan. For the past five months, she has concentrated on building a retirement plan, paying off $50,000 in student loans, and conquering her lifetime challenge--saving.

PAY YOURSELF FIRST

Taylor, who has a number of female clients between ages 25 and 32, says people are so concerned with paying their bills that they forget to put money away for themselves. "When clients bring in their budgets, there are no line items for savings," Taylor says. "You need to treat yourself like a bill." He recommends that women aim to save 15%-20% of their monthly income.

OPEN A RETIREMENT ACCOUNT

Experts also recommend contributing to a 401(k) oz a 403(b) account for women who work for nonprofits, such as schools and hospitals. Taylor suggests that since Holt. is self-employed, she contribute to a simplified employee pension (SEP-IRA). According to Vanessa Summers, author of Get in the Game!: The Girl's Guide to Money and Investing (Bloomberg Press; $15,95), since Holt's annual salary fluctuates between $48,000 and $55,000, this is a great way for her to invest as there is no minimum amount she has to contribute to qualify,

PREPARE FOR THE UNEXPECTED

Long-term healthcare and disability protection is the No. 1 goal single women like Holt should be planning for. "There must be proper savings and protection in place [in case your] income is disrupted," Taylor says.

Taylor and Kathleen Williams, a financial advisor and president of Williams Financial Services Group in Oklahoma City, also advise women to save at least three months' worth of living expenses for an emergency reserve fund in case they are temporarily out of work. "I ask my clients to get it done within a two-year period," Williams says. The money should not be put in a savings account or credit union, she adds, because it would be too easily accessible. Disability insurance is a good idea considering that one out of five people use it during their lifetime, according to Williams. "It takes a long time for Social Security to pay you for long-term disability and you may not qualify," she says. While the amount of coverage depends on the income, Summers says policies generally pay up to $5,000 each month. Young women should get policies to cover 60%-65% of their salaries.

SET YOUR GOALS

As soon as a woman enters the workforce, she should make a list of specific goals she wants to achieve and begin seeing a financial advisor to help her achieve them, says Williams. Holt has a few things that she wants to accomplish within the next two years. Aside from establishing an emergency reserve fund, she wants to get out of loan debt, buy a home, and begin a retirement fund. Williams suggests that she double up on loan payments and avoid additional debt. Women who are also interested in buying homes, she says, should set aside 10% to 20% of their income each month to save for a down payment.

Saving for retirement is the No. 2 goal, Williams says. Female retirees often receive only half of the pension benefits of men due to pay disparity. Many women between ages 60 and 65 live in poverty. "It's a result of not saving when they were younger," she says. "Single women live for the day and never learn to take care of themselves because they're waiting for their knight in shining armor to come. That's the worst thing they can do." Saving in a retirement fund as early as possible is the best way to establish and maintain a fund, as well as benefit from compounding interest, she says. There is no set amount to contribute each month, but Williams advises women to put enough away to cover at least 80% of their pre-retirement income.

START INVESTING NOW

Williams recommends investing in mutual funds over stocks because it allows for more diversification when investing on a smaller scale. However, experts advise young women to select various mutual funds based on their risk tolerance.

Since you're still young, you have a longer time horizon to reach your goals, so it's wise to start saving for your future now. The good news is it'll give you more time to benefit from the magic of compound interest. Investing $5 in a mutual fund every day over 40 years, Summers says, will yield $1 million. She adds that the average annual return of the stock market has been 12%.

WHAT YOU SHOULD KNOW

1. Save at least 10%-15% of your after-tax income. Treat your self like a bill this is the only way to grow your emergency fund us well as build a retirement nest egg.

2. Social Security should not be your only source of retirement income. Think of it as one piece of the pie and be sure to supplement that income through your 401(k), IRA, and other investments.

3. Educate yourself about saving and investing. Waiting for Prince Charming to ride in and carry you off into financial bliss is not a sound plan.

4. Retirement savings are just that. It's best to earmark these funds and put them into retirement accounts. Don't put them into readily accessible savings and checking accounts that you might be tempted to use as piggy banks.