Question: I am a 23 year old college student who is starting to discover the wonders of public radio and paying attention to the news on a daily basis. In the face of such a grim economic situation, I would like to prepare myself for the future to the best of my ability. Currently, I am able to save 25% of each paycheck and I keep that 25% saved in an online savings account which earns 2.2% APY. I do not have the capital required to make the minimum investment in items such as stocks and the like. I am also concerned that my 2.2% APY on my savings account is not enough to keep up with the rate of inflation. My goals are to save and possibly invest my money for 10+ years, but still have access to it in the case of an emergency. What should I do to help my money grow? For now, is keeping my money in a savings account my only option? Dennis, Cherry Hill, NJ

Answer: Welcome to the world of public radio! Yes, the economic news is grim, and likely to get worse in the coming months. Right now, I'm impressed with how much you're setting aside out of every paycheck. Frankly, I like what you're doing with the money at the moment. You are keeping up with the rate of inflation at the moment (at least as measured by the producer price index and the consumer price index). And if inflation does start to climb the shift will be reflected in higher interest rates on your savings in the online account.

It' isn't your only option, but the savings account is a good one. The reason I like what you're doing is that you'll have savings to tap when you graduate. That money will buy you flexibility and time when it comes to getting a job. You won't feel the pressure to use a credit card, either. When you do get that job, participate in the retirement savings plan and make an automatic withdrawal from your checking account into savings every month, say, $25, $50, $100. Personal finance is basically establishing good money habits, and you're well on your way.

Other thoughts on saving for Dennis?

Follow Chris Farrell at @cfarrellecon