Friday, July 25, 2008

Advice for Young People in Tough Economic Times

Money concerns and economic worries are top of mind for nearly everyone in my life at the moment. Front page news, top of the evening nightly news broadcasts, and the subject of blog post after blog post. As an econ major and MBA, I'm fascinated by the psychology of money and it's ability to shape the quality of our lives just by the very perception we have of it. Feelings and emotions move markets at a mad pace.

For young people, these tough economic times are particularly worrisome. High debt from school, fewer job prospects, trepidation about their very lengthy futures. It can be discouraging, though I think there is reason for hope. This week, CNN Money offered up advice from a variety of people from money managers to authors. I didn't agree with all of the advice, but wanted to add my own anecdote and advice about money in the hopes that it's helpful in these troubled times. 

1.) Regardless of the economic situations, there are jobs out there for people who are diligent, ambitious, and optimistic. In a bad economy, many people assume they can't find a job and don't even bother to look. Take advantage of that and cast a wide net. 

2.) Use new technology to control your spending, especially on your credit cards. Sites like and offer text messaging and emails of balances to help you keep tabs of where you are in your spending so you aren't surprised at the end of the month when you receive your bills. American Express also offers a myriad of on-line consumer resources with tips and advice to help you manage your financial life.

3.) Stay diversified - and not just in your portfolio, but in your career, too! Most people I know work hard at their day job without having anything other source of income. As you get further in your career, think about how your skills can be utilized in a freelance capacity that you enjoy. It gives you extra money to sock away when times get tough or unexpected expenses arise (case in point - my recent car troubles), you'll be more in control of your career and finances as opposed to the company you work for having all of that control, you'll build your network, and if you are the subject of a layoff, cut in salary, etc. during a downturn in the economy, you'll have a bit of a cushion to tide you through a job search or switch. You're the CEO of your career - make sure you're watching out for it. 

Would welcome any comments an other suggestions. Times like this require group action and efforts - a rising tide lifts all boats. 

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