The good news for young people is that it isn't all that complicated to get your finances in order. Paying off high-rate debt is a great investment. Put money into safe places, like bank savings accounts and money market funds, particularly those that invest in Treasury bills. If your employer offers a 401(k) plan and matches your contribution, make sure to put in as much money as your company will match. These are all solid, smart ways to get your finances in order.
These days it's easy to get organized as you start out because everything is online. Set up online folders to save the documents you get from your employer: retirement plan documents, loan payments, or any kind of document you'll need for reference if something happens. A lot of people throw out those papers or file them, then do a spring cleaning and throw them out then. Don't do that. It's easier to keep important records if you divide things into categories. You can toss grocery store receipts right away unless you're trying to track expenses. Once you check a credit card bill for accuracy, it can go.
Longer-term things include all pay stubs until you get your W-2 at the end of the year. Make sure it's correct, because you'll need it to pay your taxes. Also keep documentation of anything that might be tax deductible for seven years, since that's how long the IRS has to audit you. Then you'll have the proof you need. Most people are pack rats and save too much. But on the other hand, it's really time consuming to replace key paperwork when you really need it.
Beth Kobliner, author of Get a Financial Life
When Michelle Singletary thinks of personal finance, she thinks about learning that first time she learned to drive a stick shift. She was scared to death, and didn't know how cars operated. She didn't know how the engine moves. She didn't know anything about the parts. She knew how to put gas in it and drive it. Your personal finances are a lot like that. You learn the basics of what to do and you learn safe ways to drive that car, but you don't ever really understand how the car works itself. Think of your personal finances that way. It's important to know how to drive it and know a little bit about what's going on.
Michelle Singletary, Washington Post financial columnist