Young Professional

A resource guide to finances in your 20s

What does it mean to be a young professional with money? What kind of strategies are available for young professionals to build wealth? How can I, as a young professional, take control of my income and expenses? What are some valuable tools I can use to track my finances?

The following articles look to answer these questions and provide tips for how young professionals might become wise stewards of their assets.

1. The first article we found is titled "Graduating to a happy, financially secure future." It discusses some basic tips that may be useful to someone that is just entering the workplace out of college. We all know people that generate high incomes but are sucked into generating high liabilities to go with their high incomes. These people typically are good at looking and feeling and acting rich but hidden behind their financial glitz and glamour are poor financial foundations which can lead to mounds of debt that will take many years to repay. The goal of this article is to provide tips that should help you avoid these types of traps and build up financial disciplines that will benefit your long term financial goals.
   
   
2. The next article we found is titled "Planning for Retirement whether you are 20 or 59." This article covers the whole spectrum from 20-59 and has some practical tips that can help young professionals make good choices as they enter into their careers.
   
   
3. The third article is called "How the Young Can Get Rich" and is a mock case study on two young professionals and their progression to retirement. The article compares "Early Shirley" to "Late Nate." Early Shirley contributes less than Late Nate to her retirement plan over time but has the benefit of compounding interest and ends up with a much more healthy retirement fund than Late Nate who pours thousands of dollars a month into his retirement plan. The article focuses on how important it is to start contributing to your retirement plan as early as possible to reap the benefit of compounding.
   
   
4. This article talks about a broad plan for people who want to retire early. I think young professionals now; have a different perspective than their parents towards working and life balance. Young professionals don’t want to work until they are too old to enjoy their savings, so here is a quick guide on how to achieve that goal. Again I thought about timeless material. This article is titled "Retire Early"
   
   
5. This article relates to credit scores and the myths behind them. Surrounded by many college students (I live 4 miles from Michigan State), I constantly hear different theories about credit scores. Some theories are pretty far out there! Believe me, the craziest story that I heard was from a “finance major”; she said that the best way for you to have a high FICO score was to be late on a couple of payments to your credit card, so that the credit card companies make a little bit of money off of you and they like you more!This guide will help answer any questions you may have about how they are formulated. Many of the mistakes young professionals make come when they are just beginning to manage their own money and credit and don’t have a lot of experience yet. Read the article here to learn more about how a FICO score is formulated. What's in your FICO score?
   
   
6. The final resource for Young Professionals we will cover in this entry deals with budgeting. Specifically, one personal finance tool that we have found to be particularly helpful in budgeting and money management is called mint.com. What is even better about this service is that it is free! Mint.com helps you understand how you spend your money, helps you track all of your accounts at once, including investments and liabilities and hosts very powerful and easy to use budgeting tools. When you add all of your accounts to Mint.com it automatically brings in approximately 3 months worth of transactions and also automatically categorizes them for you. The system for categorizing transactions is robust and easy to use as well, so if you do not like the category that the software selected for your transaction you can change it with a click of a button.
   
   Many times as young professionals, with increased purchasing power, we lean on debt instruments like credit cards to feed our desire for toys and luxuries. Often this use of credit can get out of hand because we don't want to take the time to track our expenses. With Mint.com it becomes a much less painful task to stay on top of our accounts. It is an excellent service that anyone, young or old should check out! Here is the link: Mint.com

If you know of any other great resources on money management for Young Professionals please email us at christopher.hege@gmail.com so that we can share them with the Financial Planner Alliance community.

The articles in this post were found by our new contributor, Pedro Gallegos.

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Tags: Young Professional, Young Professionals,Money Management in your 20s,Managing your finances, Budgeting

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