Young, motivated and tech-savvy adults have all the information you need to manage your personal finances right at your fingertips. Managing your money is probably one of the single most important accomplishments you can achieve. Every aspect of your life depends on it.
Unlimited Career Options
Even though your education or credentials make you an ideal candidate for your first job, managing your finances may determine how far you'll go in your career. The number of employers who use credit checks is increasing.
"Recent statistics are scarce, but when the Society for Human Resource Management polled its members in 2006, 43 percent of their companies ran credit checks on some or all potential hires," MSN Money contributor Liz Pulliam Weston reports.
Employers are using background investigations -- and credit checks -- to determine who's best qualified for a job or promotion. If it comes down to two equally qualified candidates, the one who demonstrates she's managed her finances well might be picked over somebody who hasn't.
The stress of having your finances out of whack can take its toll on your body and mind. Managing your personal finances can be as important to your physical and mental health as working out at the gym. Stress has a way of affecting every part of your life.
Take control of your finances from this point forward and work out problems as quickly as they arise. However, don't become so obsessed with finances and money to the point where you can't enjoy yourself. Make wise decisions about spending and saving.
Lower Interest Rates
Buying your first home is a big step. Managing your personal finances is important for a few reasons when it comes to getting the biggest bang for your buck. When you have control of your finances, you can qualify for lower interest rates on a home, which means you can pay less for your home and still enjoy your own space. Another advantage of managing your finances is that you can sleep well at night knowing you can make a mortgage payment that doesn't make you "house poor." House poor means you spend all of your money -- income and discretionary cash -- on your home.
If you manage your personal finances well, you can save enough for a sizable down payment, which can reduce your monthly payments even more. You also can afford to make extra payments on your mortgage each year, creating a faster track to a mortgage-free lifestyle.
Enjoy an Early Retirement
For young adults, retirement planning sounds like a far away and distant goal. However, if you manage your personal finances well, you could be sipping margaritas on a tropical island or traveling the globe while you're still young enough to enjoy an active lifestyle.
Once you're working and saving toward retirement, talk to friends and mentors about your long-range goals. Bouncing ideas off others can help. Even if you want to work until the traditional retirement age, managing your finances is important for lots of reasons. You might want to start a family someday. Having an investment plan in addition to your retirement savings is a smart way to go.
- "Kiplinger": Tax Breaks for Buying a Home
- U.S. Federal Trade Commission: Mortgage Payments Sending You Reeling? Here's What to Do
- "The Wall Street Journal": Getting Them While They're Young
- My Money: Life Events
- Financial Planning Association: Starting Your Financial Plan: A Beginner's Road Map
- Wise Up: Financial Planning for Generation X & Y Women
Ruth Mayhew has been writing since the mid-1980s, and she has been an HR subject matter expert since 1995. Her work appears in "The Multi-Generational Workforce in the Health Care Industry," and she has been cited in numerous publications, including journals and textbooks that focus on human resources management practices. She holds a Master of Arts in sociology from the University of Missouri-Kansas City. Ruth resides in the nation's capital, Washington, D.C.