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TheStreet Open House

Why Grads Should Keep Living Like They’re Still in College

NEW YORK (TheStreet) -- The first few years out of college can be exciting -- first job, first paycheck, first apartment -- but if you don't stick to a tight budget, student loan payments could be the least of your financial woes. Your first salary likely won't go very far, and rather than living lavishly, recent graduates should watch their wallets almost as closely as they did during school. Experts weigh in with five reasons why grads should continue living on a college budget as long as they can:

1. There's no such thing as 100% job security.

"No one has absolute job security," explains Gail Cunningham, director of media relations for the National Foundation for Credit Counseling. "Just because you might have been fortunate enough to land a job, you still have to prove yourself."

Even if you think you have the greatest job in the world, it's best not to take on any major financial commitments or overspend on vacations or clothing until you're firmly entrenched in your new position, Cunningham says.

If your job offers a 401(k) or other retirement plan, take full advantage, even if you're just starting out and feel like you need every penny to pay rent.

Read More: 5 Ways Recent Grads Kill Their Chances of Getting Hired

"Retirement seems a very long way off, but time is money's best friend. You're probably used to living on a fraction of what your new paycheck is, so keep doing it.  This will allow you to contribute the maximum allowed amount to your retirement plan at work."

In the event your first job opportunity doesn't work out, you'll be glad you invested while you had the chance. Remember that not every company will offer a retirement plan.

2. You need to figure out where you really need to spend, rather than just spending on everything.

Don't jump instantly up to a new spending level just because you're getting a paycheck, says Reyna Gobel, author of CliffsNotes Graduation Debt, 2nd Edition.

"I always recommend you meet with someone at your university student money management office or a credit union representative to devise your first post-graduation budget," Gobel says. "Talk to them about areas where you do need to increase your spending. For instance, get some decent work clothing that costs less than $100 per outfit, minus shoes. Also, give up ramen for a sustainable grocery budget of healthy foods."

Gobel says when she was starting out, she saved on the cost of food by shopping at local markets, which are often cheaper than traditional grocery stores.

"I scaled back on a lot of things while I got used to my new cost of living. I was able to eat healthy and shop largely at farmer's markets for about $250 per month."

3. You need to focus on getting life's "essentials" in order and paying down student loans.

Instead of spending beyond their means, recent grads should focus on getting their life situated and managing their money the "right way," says financial attorney and debt specialist Leslie Tayne, of the Tayne Law Group.

"In receiving their first jobs, many college graduates may be tempted to go out and splurge, but it is crucial that they are putting money aside and budgeting in order to pay for the larger and more essential things, such as bills, a car, housing and possibly preparing for marriage, kids and retirement," Tayne says.

Within the first few years after college, graduates will have a better idea about their cost of living and how to budget accordingly, which will translate into having some money available for larger financial goals, she says.

4. You finally need to start saving money -- even if it's tough.

To start building wealth early in your career, you've got to keep your debts at a minimum, Tayne says.

"As exciting as it can be to have a credit card or bank account, as well as it can be to be getting paid, consider regarding your money as your future rather than for the here and now," she says. " It's easy to use your money on fun things like vacations, clothes and partying, but this spending should be  done in moderation."

Your primary goal should always be making sure you're financially comfortable and secure.

Read More: 5 Worst Strategies for Paying Off Your Student Loans

"You never know what life will be like in the future and what added complications and expenses might come your way," Tayne says, so consider living at home or with roommates and spending on only what is an absolute necessity to help streamline expenses.

5. You need to learn that there are more important things in life than the things money can buy.

When you get those first paychecks, it can be dangerous to place too much importance on material goods, Tayne says. Recent grads shouldn't get into the habit of measuring their successes by how much they can buy.

"Instead of indulging, graduates should put more emphasis on the importance of meeting new people, trying new things and discovering new interests, which keeps life fun and less expensive."

Instead of spending your first few years' worth of paychecks on clothes and nights out, invest in your future by starting to save right away and dine on cheaper foods for as long as you can, at least for the next few years, she says.

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