It’s a good thing that job prospects are looking up for the class of ’08 since according to Nellie Mae, a Student Loan Corporation (the average student debt is approaching $19,000. If you are a new grad, now is the time to start thinking about creating a bright financial future. You are your greatest investment; don’t let it go to waste. With a little planning and advice from the pros like George L. Divel III, Financial Advisor and President of Investments at Global Wealth Advisors and Russell Bailyn Wealth Manager and author of Navigating the Financial Blogosphere you can take hold of your finances fresh out of the gate and guide yourself toward financial competence and economic independence. In a few quick paragraphs you can learn some of the finance basics they should have taught you in high school:

Student Loans Are Good Debt.
Mr. Divel reminds graduates not to worry too much about their debt but to use it to their advantage. Making your student loan payments on time can help you establish a credit history and help you improve your credit score. He cautions against paying off student loans with an inheritance, signing bonus, or other windfall until you have carefully examined your finances and decided how to manage the lump sum. It might be more financially prudent to invest the money, use it to start an emergency fund or save it for a down payment for a home or other value earning asset.
Bailyn explains that, “time is perhaps the most important component to money,” and urges those with a lot of student loan debt to consider a debt consolidation strategy. Look for a service provider who will allow you to merge your loans into a single loan at a lower interest. You might also consider deferring your loans, if that option is available, until you are in a better position to make the minimum monthly payments. As with any debt payment strategy, pay off loans with the highest interest first.

Another “good” thing about student loans is that the interest you pay may be tax deductible based on your income and location. In addition, student loan debt is not revolving debt; the amount decreases as you pay and your debt can often be consolidated at a lower interest rate allowing you to save more.While you may not like the idea of carrying debt of any kind, the bottom line is that student loans are unlikely to hurt your finances as long as you keep your payments current. Getting behind on your loans can result in a damaged credit score that may hinder your ability to access credit in the future and cost you plenty.

Make a Budget and Fast.
Before the money starts flowing in (and out), you owe it to your fiscal future to create a budget. Your first out-of-college budget does not have to be complicated, a simple spreadsheet or list will do. Start off by listing monthly non-discretionary expenses: loan payments, rent, transportation expenses, pet needs, utilities, and food. Since the price of gas and food is likely to fluctuate with the economy it is a good idea to think of ways to cut down on these rising costs. Next, add on discretionary expenses like entertainment and shopping. Try to think, ahead about costs that may come up less frequently, like car inspection or repairs, insurance and memberships, so that you are not caught off guard. Add these costs to your budget. Combine figures from you bank accounts, credit card and budget to create a more comprehensive budget to help you manage your money. Divel reminds clients that a good budget will allow you to live for today but plan for tomorrow. There should be some room in the budget to start a savings account and create an emergency fund. Be honest with yourself when creating your budget, it is not set in stone but if you can’t live with your budget on paper you will never be able to adhere to it. Keep track of your expenses, compare them with your budget and then either amend your spending or your plan to suit your goals. If you are unsure of how to set your financial goals or how to manage your finances, consider consulting a financial advisor.

Start Saving Money Now.
The sooner you start saving money the more you will have for your future. Contact the human resources department at your job and find out if you are eligible to participate in any employer sponsored savings plans . If you are self-employed, Divel recommends opening a Roth IRA or a simple IRA which is similar to a 401K and can be administered at a low cost by an investment house. Bailyn concedes that while long term investments like these may be unpopular with younger investors they can lead to huge payoffs because of their tax-deferred status. In some cases (for example a home purchase) you may be able to tap into these saving and essentially borrow money from yourself.
If you are not ready to do either Divel suggests forcing yourself to save through automatic contributions to a savings account. Since you won’t see the money in your checking account, you won’t miss it and it will grow undisturbed until you decide how to use it. Bailyn adds that this forced saving should be deposited into a high-yield savings account, a mutual fund or other investment vehicle that will help your money grow.

Avoid The Urge To Splurge.
Of course since you are starting out on your own you will have some capital expenditures. Renters may have to part with a deposit that may equal up to three month’s rent, depending on the market. With what’s left you may be tempted to immediately start furnishing your new place and there are plenty of stores willing to offer you enough credit to do just that. They may even throw in a limited time only 0% interest rate to seal the deal. Store cards are a double edged sword but with discipline you can use them to your advantage. Divel advises using in-store credit only if you can pay off the full amount by the time the interest rate resets from 0% to double digits. If you do this, “you are using their money for free” without dramatically interrupting your monthly cash flow. Make sure that you only use as much credit as you can afford to payback while avoiding the interest. Do a little bargain hunting and shop the sales. Holidays and end-of-season sales can yield great bargains for those willing to search for them. View your apartment as a work in progress; there is no need to go into debt or damage your credit just to have a lot of nice stuff. Once you have some possessions you should get renter’s insurance to protect your assets.

For more information for new grads, check out these mainstreet.com articles:
New Grad’s Guide To Staying Out Of Debt Pt. 1
New Grad’s Guide To Staying Out Of Debt Pt. 2
The Best Gift Card For Grads: A Financial Planner's Business Card
What Happens When After Graduations Your Friends Earn More Than You?
How To Survive Living At Home As An Adult