This post is written by Kathy Mayse who began her writing career as a reporter for “The Jackson-County Times Journal” in 2001. She was promoted to assistant editor shortly after. Since 2005, she has been busy as a successful freelancer specializing in Web content. 

There are two major milestones in a young adult’s life: leaving the nest to go to college and leaving college for the real world. Both can be full of complications, anxiety, and inevitable mistakes. However, there are things you can do to make sure your finances don’t take a hit as you navigate the difficult task of graduating and finding your place in the world.

One of the most important lessons regarding finances that everyone either learns the easy way or the hard way is learning to live within your means. This means spending less money than you earn. Sounds simple, huh? But, you’d be surprised just how difficult this seemingly simple concept is to master for many people. And it’s just the tip of the financial iceberg.

For true financial independence, read the following financial tips:

1) Savings

Financial experts recommend liquid savings amounting to six months salary. Liquid savings are funds that you can immediately withdraw in case of an emergency. If you have to cash it in, apply for it, or pay it back later, it’s not considered liquid. Make it your goal to save 20-percent of your check each and every time you get paid. Take it right off the top. If you earn $500, act like you only earn $400 a week. Put your money away until you hit the six-month threshold, but don’t stop there. Keep saving 20-percent of your earnings for future expenditures and long-term goals.

2) Create a Budget

Although many adults are guilty of not doing this, creating a budget and sticking to it is one of the most important aspects of managing your finances properly. Create a budget outlining all of your monthly expenditures including the money you spend for entertainment and extras. There are software programs that can help you do this quite efficiently. They will even track your spending and alert you if you’re over budget.

3) Manage Bills and Debt

Paying your bills late can have devastating consequences. Set up a bill filing system and payment schedule. Set aside time each week to pay your bills and get them in the mail. Better yet, sign up for bill pay, so your bills are paid automatically every month.  Be sure to pay ahead of time to avoid late payments and additional fees.

4) Financing a Car

If you’re a recent grad, you probably can’t wait to get rid of the car your parents sent you away to college in and shop for your first adult ride. However, car shopping can be challenging, especially when it comes to financing your car. Never shop for a car until you have a down payment. You see, when you pay no money down, you often end up owing more on the car than it’s worth. Strive to put 10 to 20-percent down, more if you have it. You can shop for the best interest rate at places like Auto Credit Express and DMV.org. Your interest rate greatly affects the amount you will end up paying overall.

5) Credit Card 101

Having a credit card can enhance your creditworthiness, but it can also harm it. Never carry a balance that’s greater than 10-percent of your credit limit. For example, a card with a $2,000 limit can carry a balance of $200 without harming your credit rating. If you have more than one credit card, try to keep half of them free of balances.

Building a secure financial future starts as soon as you clock in at your first job. Establishing good financial practices when you are young means that you will enjoy more financial freedom and security, a higher credit rating, and greater financial flexibility throughout your life. It’s never too early to lay the foundation for financial success.

P.S. Want more financial tips? Make sure you check out Anna’s posts about how she got out of debt and how getting out of debt influenced her career.