BERKELEY HEIGHTS, N.J. ( TheStreet) --It's a big moment when recent college graduates get their first paycheck from an employer. The excitement quickly fades as they're introduced to the concept of payroll deductions.

Older workers know them by heart: income tax withholdings, medical and employee benefit deductions, FICA and employee retirement plan contributions. For younger workers, learning these and understanding the pay stub is a critical component of understanding their cash flow -- the guidepost to knowing how much they really have available to spend.

The personal cash flow is critical because it sets the foundation of a person's financial future. Having an accurate cash flow allows you to live below your means so you can set aside money for long-term goals. People who do not have a handle on their cash flow are more likely to overspend and build up credit card debt.

To prepare a personal cash flow, you can of course use a personal finance program such as Quicken ( INTU). I prefer the old-school method of creating a cash flow spreadsheet.

Let's start with the revenue side, using the pay stub as your starting point. Net take-home pay is essentially your revenue. Before assuming that is a good number, though, you need to check two things:

First, if your income tax withholdings are a reasonable estimate of your tax liability. If your tax withholdings are too low, fill out a new W-4 with your employer. You will need to adjust down your net take-home pay to reflect higher tax withholdings.

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