Image: Couple and cash © Big Cheese Photo, Jupiterimages

If you're in your 20s and broke, you're in very good company.

Incomes are low, debts can be high, and many households headed by 20-somethings live on the financial edge, according to the Federal Reserve's 2007 Survey of Consumer Finances, released every three years.

For example:

  • The median income for families headed by people aged 20 to 29 was just more than $30,000 in 2007, according to Federal Reserve statistics, compared with medians of $54,000 for those in their 30s and more than $60,000 for those in their 50s. In inflation-adjusted terms, median incomes for 20-somethings didn't budge from their levels in 2004, the last time the Fed conducted this survey.
  • Thirty percent of 20-somethings made $20,000 or less.
  • 20-somethings were more than twice as likely as older folks to have a negative net worth; one out of four families headed by people aged 20 to 29 owed more than they owned. For those with a positive net worth, the median wealth was $7,060; including everyone brought down the median to just $6,400.
Net worth by age group
Age Median Top 25% Top 10%
20 to 29 $6,400 $35,000 $132,000
30 to 39 $51,200 $184,000 $436,000
40 to 49 $133,100 $371,000 $840,000
50 to 59 $229,300 $605,000 $1,350,000
60 to 69 $256,300 $710,400 $2,030,000
  • More than one-third of 20-somethings had education loans. The median amount owed to student lenders was $13,000, a sharp increase from the previous Fed survey in 2004, when the median amount owed was $9,200.
  • One out of 13 families headed by 20-somethings was at least 60 days late on a bill. Only folks in their 30s had a higher delinquency rate, with 9% of that group 60 days or more late.

Worse, all of this was compiled before the economic downturn wiped out savings and brought a wave of unemployment and foreclosures. Many of those already close to the edge now face financial disaster -- and the young are most likely to be on that edge.

Get your act together now

But there is also good news if you're in your 20s: Time really and truly is on your side. If you get your act together now, you can achieve financial independence decades ahead of your peers who keep muddling from paycheck to paycheck.

Consider this: Someone who puts $4,000 a year into retirement accounts starting at 22 can have $1 million by age 62, assuming 8% average annual returns. Wait 10 years to start contributing, and you'd have to put in more than twice as much -- $8,800 a year -- to reach the same goal.

Live cheaply as long as you can. Newly minted adults tend to overestimate how far their paychecks will go and blow too much on apartments, cars, wardrobes, eating out and all the other trappings of grown-up life. A smarter approach: Keep living like a broke college student for a few more years. You'll get a better handle on what you can really afford and be able to free up more money for real adult goals, like retirement and health insurance. Speaking of which . . . .

Get health insurance. You're one accident or illness away from financial disaster if you don't have coverage. If your employer doesn't offer insurance, try to buy an individual policy. Opting for a high deductible can keep the monthly premium down but still offer you protection from catastrophic medical bills.

Shovel money into your retirement funds. If your employer offers a 401k or other retirement plan, sign up for it and contribute as much as you can. If not, start contributing to a traditional or Roth individual retirement account. Aim to put aside 10% to 15% of your gross pay. Contributing every dime you can now will give you flexibility when you're older, either to retire early or to cut back your contributions so you can cover other expenses (like future children's college educations) without derailing your retirement plans.

Take a chance. You're young, so you have decades to ride out the stock market's ups and downs. Consider putting 80% or more of your retirement funds into stocks or stock mutual funds to take full advantage of their potential for growth. If investing baffles you, consider opting for a "lifestyle" or "target maturity" fund: You pick a target retirement date and let experts do the rest.

Be strategic about debt. Pay off those credit cards and resolve not to carry balances in the future, because the interest you pay is money down the drain. Then focus on paying off private student loan debt, which typically carries a variable rate. But don't necessarily rush to pay off federal student loan debt or mortgages, which tend to be relatively cheap and tax-deductible. Instead, make sure you're contributing the maximum to your retirement accounts and have your other financial bases covered before accelerating payments on those debts.

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Pay attention to your credit scores. Credit scores are the three-digit numbers lenders (and others) use to help gauge your creditworthiness, and they're key to your financial life. You'll pay higher interest rates and have more trouble getting loans if your scores are poor, and bad credit can cost you jobs, apartments and higher insurance premiums. Pay your bills on time, keep credit card balances low, and apply for credit sparingly to keep your scores in good shape.

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.