Money Managing Tips for Young Men Mired in a Bad Economy

As the economy worsens and financial forecasters continue to predict more doom and gloom as the calendar year wears on, many of the headlines have been grabbed by stories of older investors losing their life investments thanks to a plummeting stock market. As harrowing as such tales are, they paint only part of the picture. In reality, no investor, young or old, is immune to the fears the markets have instilled over the last several months.

Young men, for example, are facing significant uncertainty as they attempt to develop a financial strategy that can help them avoid the fate of so many of today's Baby Boomers and senior citizens. With so many horror stories of financial ruin making the news today, it's no wonder many young men are lost when it comes to developing a financial strategy of their own. Not wanting to end up a horror story themselves, young men are understandably fearful of entering such an unstable market. While each individual must develop his own investment strategy rooted in individual goals and levels of comfort, there are certain things all young men should do as they prepare to implement their investment strategy.

* Have cash readily available. In the opening month of 2009, nearly 600,000 Americans lost their jobs. What that illustrates perhaps more than anything else is that no one's job is safe in the current economy. Young men who recently entered the job market could find themselves in an especially untenable position. They could very well be the low man on the totem pole, an unenviable position to maintain in light of so many businesses being forced into mass layoffs.

With that in mind, young investors should realize the need for emergency cash. This should be taken care of before investing so much as a dime in the market. In general, it's best to have at least three months' worth of bills saved in an emergency fund. Calculate just how much you'll need by adding up your monthly expenses (rent, food, car, and other necessities) and multiplying that by three. It might even be a good idea to increase an emergency fund in the current economy, where jobs are scarce and competition fiercely competitive. Laid off workers can and should expect a lengthier period of unemployment than they might in a more healthy economy. That said, consider adding a month or two to an emergency fund as protection against longterm unemployment.

* Determine tolerance for risk. While many investors would love to be wheeling and dealing risk takers, others prefer a safer route. Some investors are simply averse to risk, preferring instead to conservatively invest. For young men, the beauty of investing young is the freedom to determine risk tolerance and still make the most of investments. Those who invest young can take more risks if it makes them comfortable. In addition, young people averse to risk needn't worry about money they're losing by not taking more chances. Because many people do not invest while young, those who do are already miles ahead. They can afford to embrace risk or be conservative and still likely earn money on their investments. All it takes is determining a level of risk one can be comfortable with, and using that as a foundation on which to build an investment strategy.

* Be versatile. Many young men are not aware of just how quickly time flies, particularly once they've entered the professional world. Days turn into months, months into years and years into decades. Oftentimes, young men will say, "I'll begin saving tomorrow and pay down my existing debt today." While it's important to pay down debt, it's also important to be versatile with money. In addition to paying down debt each month, begin saving. Doing so facilitates the realization of financial goals, which for most people are very simple: paying off debt and saving for the future. But because a day quickly turns into a month and a month into a year, it's easy to find oneself without significant savings after working for several years. While it's good to eradicate debt, it's also important to establish savings. Be versatile enough to accomplish both.