Five Pieces of Financial Advice

My niece graduated from high school yesterday. In an effort to give her succinct yet useful advice, I pulled her aside and after discussing what kind of laptop she wanted for her graduation gift (which got me her full attention), I told her there were five simple things she needed to know to avoid many of the financial problems that most of us make when we are young:

1. Do not use credit to buy anything other than a house. When kids turn 18 they are inundated with credit card offers. This is crazy as many kids barely have a job at that age and can quickly get sucked into a lifetime of debt thanks to the credit companies. Pay cash for everything!
2. Save a small amount (10%-20%) of every chunk of money that you get over your lifetime (paychecks, tax refunds, birthday checks, shopping rebates, etc). Put this money into any financial vehicle that will earn interest such as a savings account or mutual funds, and the magic of compounding interest will make you a millionaire.
3. If you want to know if you can afford something do this simple math: pay all of your bills and then see how much cash you have left over. If this cash will pay for what you want, you can afford said item, if not, save this money to add to the money left over next month and see if that will cover what you want. If you still don't have enough cash for the thing you want to buy, save this money and continue the process until you have enough to pay cash for what you want.
4. Stay away from the following items in the same way you would stay away from radium/smallpox/other horrendous, nasty things: payday lenders, rent to own places, leases on anything, get rich quick schemes, and extended warranties.
5. Pick a good boyfriend/spouse. Your financial life or lack thereof will directly correlate to the type of person you are with. If you pick a loser you will end up paying bail, child support, credit debts, gambling losses, excessive cell phone bills, and all of the other things that affect people without the good sense to pay attention to their responsibilities.