The 7 most crucial money lessons to learn before age 30, according to a Harvard grad who was raised in poverty and now runs a finance site

1. Harness the power of retirement accounts

Looking at the most recent census data, the median value of retirement accounts was $10,000.

That figure is powerful, because it's 140% or 2.4x larger than the overall median net worth for single-person households under the age of 35. Only home equity represents a larger share of wealth for this group.

This means that retirement accounts are one of the most reliable ways for young people to build wealth. Interestingly, the share of net worth is split roughly equally between 401(k) and IRA accounts.

Unfortunately, the data shows that many young people are not contributing to a 401(k) or IRA account since the median net worth is so much lower than the median value of those types of accounts. Both types of accounts use tax-savings to incentivize people to save for retirement, but the 401(k) has the added benefit that employers can make matching contributions into those accounts.

2. Leverage the stock market and learn how to invest

If they are able to save money, many people keep their money in a bank account because they are intimidated by the stock market or are afraid of losing money. Contrary to those fears, the second largest contributor to net worth for young people aside from their home is stocks and mutual fund shares.

If you are not investing because you don't know how to do so, you are likely not familiar with low-cost index funds. These investments are simple, highly effective and extremely affordable. This is also the way I was taught to invest my money by my finance professors at both Harvard Business School and the Wharton School of Business. As one professor would say, "Picking individual stocks is for dummies."

By investing in index funds like Fidelity's FZROX or Vanguard's VTSAX, you are essentially investing in the entire stock market, giving you broad exposure to many different companies while lowering the chance of picking the wrong company or sector to invest in. They also charge virtually no fees, which means that more of your money is staying in your account. No investment is guaranteed, but this is the way the world's top money managers recommend individual investors to invest their money.

3. Realize that you can't buy happiness sooner rather than later

Evolutionarily, we are all coded to want more than we already have. It's what has allowed humankind to advance to heights that would have barely been imaginable even as recently as a few hundred years ago.

One negative side-effect of this drive is that it's easy to want to keep up with the proverbial 'Joneses.' Learning that money can't buy you happiness is a lesson that everyone will eventually learn. Books like "Tuesdays With Morrie" or Randy Pausch's famous "Last Lecture" highlight the fact that at life's end, the most important things are hardly related to a desire for more physical objects or purchases.

Learning this lesson will allow you to avoid making costly mistakes like not saving for retirement in lieu of spending hundreds of dollars on fitness classes. There's a balance to everything.

4. Living within your means is a strength, not a weakness

When I lived in New York City after college, I began to notice an interesting phenomenon. Growing up in poverty, I was used to not being able to participate in every social event in high school and college because I simply wasn't able to afford it. With peers in the same shoes, that was an acceptable reason.

However, as soon as I started working, the pressure to go out and spend money socially changed entirely. All of a sudden not having enough money to go out was met with opposition. But the fact is that just because you are earning money, it doesn't mean you can afford to spend all of it.

5. Pay yourself first

As soon as your paycheck hits your bank account, you need to prioritize your living expenses and saving for retirement before you even start to think about heading to the bars or restaurants. Whether you learn how to budget in order to spend less than you earn or utilize another method, few things will affect your financial well-being more than this.

If you find yourself over-spending, focus on saving on large recurring expenses first, like your rent and other overhead expenses. This will make a much larger impact than cutting out that cup of coffee in the morning. A better example of a more meaningful place to save money is on recurring big ticket purchases like contact lenses, which often cost hundreds of dollars. Use sites like Contacts Compare to find the cheapest place to buy your contacts online.

6. Learn what affects your credit report and become a credit all-star

Few things will cripple your finances faster than running up a credit card balance and paying interest on that balance. This is because credit cards have extremely high interest rates. Yes, even the new flashy Apple credit card has interest rates much higher than you'll be able to earn by investing your money.

The reason you will want solid credit is because it will save you money when you make the most important purchase of your life: your first home. Having good credit will give you access to the lowest mortgage interest rates available. Even if your credit allows you to lower your mortgage interest rate by only 0.25 percentage points, that is a meaningful amount of interest saved when you consider the fact that the average mortgage is over $300,000, according to the Federal Housing Finance Agency.

The two most important things that affect your credit score are your ability to make on-time payments and keeping your credit utilization low.

Focus on always making at least the minimum payment on time. Ideally, you'll always want to pay the total amount due in order to avoid interest fees. This means you'll want to utilize your credit card like a debit card and never spending more than you can afford to pay off. This will also keep your utilization low, boosting your credit score to new heights.

7. Increase your income to reach your financial goals

In order to reach your financial goals, you need to establish goals in the first place. Set time aside to think about where you want to be six months, one year, and five years from now from a financial standpoint. From there, you can focus on the level of income and expenses you need to reach your monthly and annual savings and investment goals.

But what about actually earning that money? As you get older, you'll realize that playing an active role in managing your career will make a larger impact to your financial stability than you realized. It may mean you need to learn how to ask for a raise or seek a higher paying job. (If you think you need to switch jobs, read my guide on how to make a resume that will get you noticed.) Picking up a side hustle to accelerate your financial goals can also fundamentally change your financial outlook.

For women, this is more important than ever. The data shows that on average, you earn only 78% as much as your male colleagues for the same work. You may not think this is the case for you, but it likely is. Make sure you are being compensated fairly for the work that you do.

This article was written by Camilo Maldonado, who writes about personal finance on his site The Finance Twins.