The employer match plus the tax savings means you'll get the most "bang for your buck" by saving in an employer-sponsored retirement plan. That's why if you find it tough to save, that's where I'd start saving, setting aside enough to capture the full employer match. Then, plan on increasing your contribution by 1 percentage point once a year, maybe at the time you would receive an annual raise.
Even if your employer does not provide a matching contribution, the tax savings and automated nature of retirement-plan savings make a 401(k) or other similar account a good place to start saving.
At the same time, I would also set up a bank savings account that is funded through direct deposit from your paycheck. Even if it's just $10 or $20 a week, you want to begin establishing a cash reserve that you can tap for major expenditures or emergencies. You need this type of fund to help avoid tapping retirement accounts and other long-term savings in times of need.
For this account, shop around for the most competitive interest rates. I like the idea of setting up this account with an online bank, which typically pays higher rates than a local bank. Also, there might be less temptation to tap an online account than a bank located just around the corner that you can walk into or tap with an ATM card.
Over time, increase how much goes into this cash account, just as you would with retirement savings. Better to start small, build some momentum and then add more.
Eventually, as you earn more money and feel more comfortable about your finances, I would look to establish a Roth IRA -- or if available through work -- contribute to a Roth 401(k) or Roth 403(b). You will pay taxes on money contributed to these types of account, but over the long haul, you'll likely come out ahead because no taxes will be due on withdrawals taken during retirement.
At 23, time is on your side. Take advantage of it.
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
David McPherson is founder and principal of Four Ponds Financial Planning in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at email@example.com.