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Start retirement saving right

Gerri Willis answers reader email on where to put your first investment, the consequences of reducing your credit limits and how to avoid hotel fees.

By Gerri Willis, CNN

NEW YORK ( -- Question 1: I am a 26-year-old professional. My parents just generously gave me $10,000. I want to use this money to begin saving for my retirement. I will contribute $4,000 to my Roth IRA. Any advice on what to do with the remaining $6,000? - Meghan, California

Meghan, you can afford to take some risk, so check out stock mutual funds. T Rowe Price, Vanguard and Fidelity have low cost funds. Index funds are another good alternative.

If you don't have an emergency fund, think about setting aside some dough for that as well - you'll want three months of living expenses that you can tap at any time. Put the money in a money-market or high-yield savings account.

Question 2: I have excellent credit, and my limits are much higher than I would ever use. Does it count against me if I just reduce my limits? - Douglas, Illinois

Doug, credit bureaus consider your debt to available credit when determining your credit score. So limits alone don't matter so much. Think instead about getting rid of any mistakes on your credit report and reducing the number of credit cards you have to a handful - say three or four. Pay 'em down as quickly as you can. The bottom line - as long as you can resist the temptation of a high limit, reducing it has no advantage.

Tip 1: Now here's a tip from Chris in New Jersey about hotel fees:

"I stayed at a hotel that delivered newspapers to your room. I thought this was an amenity. They didn't tell me that if I didn't want the paper, to let the front desk know and $0.75 would be deducted from my daily bill. So much for a 'free' copy of the paper."

When it comes to hotels, you're often paying for more than just the room itself. You can be charged for using the business center, the pool, the fitness center - and, like Chris points out, there can even be charges for the daily newspaper.

The best way to prevent extra fees is to ask about surcharges when you make your reservation. If you wait until you check in - or worse, check out - it will be much harder to dispute the fees. Top of page

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