It's good news and bad news for U.S. college graduates this summer - the national employment picture looks rosy, but gaining the best entry level professional jobs has historically been an uphill climb for graduates.
Overall, about 4 million Americans are graduating this year and they'll need a job right away, as the average college grad owes $37,000 in student loan debt.
But first things first, newly-minted college grads. Even before starting that all-important first job, there are smart steps you should take to set the stage for a healthy financial outlook, for both short- and long-term.
The smartest young financial consumers will smart with these forward-thinking money moves:
Create a budget - A budget is a spending plan, based on income, lifestyle and goals. "Grads should begin by tallying all set monthly expenses - including housing, utilities, student loans, car payments and any credit card debt - and variable expenses, such as groceries, gas and clothing," advises Sean Fox, co-president of Freedom Financial Network, in San Mateo, Calif. "The total will help set a target for monthly income and savings."
Get a credit card, and start building good credit - Conrad Magalis, a 29-year-old college graduate from Eden Prairie, Minn., says he's been working steady in and after college, and building wealth the entire time. "The best advice I can give is to start building your credit early," he says. "Many people think that having a credit card is a bad thing, because it encourages people to spend on items they cannot afford. While this is true, I've used credit cards to not only build my credit, but to help pay for unexpected bills or even my car insurance in six month intervals." The more credit you have, with good payment history, the better off you'll be when it comes time for your first big loan - a car or a house, Magalis adds. "Make sure to keep your spending to under 10% of your card balance, because credit agencies use this measure along with payment history as major factors in credit scoring," he advises.
Don't fall into the "lifestyle trap" - This tip isn't exactly a move - it's a mindset, and an important one for young Americans to take. "The single biggest mistake that many new graduates make is living a lifestyle that they can't possibly afford," says Mark Sinderson, owner and financial planner at Financial Clarity Partners, LLC, near Atlanta. "That new job with the regular paycheck can seem like a never-ending pool of money." "But frequent happy hours, concerts, vacations and expensive cars and electronics can quickly add up, restricting your options and impacting your financial well-being for years to come," Sinderson adds. To combat that scenario, create and stick to a spending plan that is realistic given your current situation. "Also, build in some 'fun money' but also make sure you are saving for the future," says Sinderson.
Set a regular "savings percentage" - "The best immediate money tip I can give new grads is to save 10% of every paycheck for retirement," offers McKinzie Brocail, a 25-year-old budget-living blogger in Houston. Starting this saving habit at the beginning of your career is a great way to save a substantial amount of money for retirement, Brocail states. "If your company offers a 401(k) plan, definitely contribute 10% to the plan," Brocail says. "If your employer offers a contribution matching program, meet or exceed the percentage of your contributions that they will match."
Know your exact student loan debt - Before you can tackle your student loans, you need to face them head-on, says Adrian Nazari, CEO of Credit Sesame, an online credit and loan management platform. "Visit your student loan servicer's website for each of your loans to note the principal amounts remaining on your loans along with the interest rates," he says. Once you do that, start making payments - the more the merrier, Nazari says.
Be smart about your credit card - "Always pay more than the minimum - this is the single most effective and easy method for paying any debt off," Nazari advises. "If you set up automatic payments with the extra amount included, the extra money goes directly to paying down the principal. Automatic payments also make it less likely that you miss a payment or change your mind." In addition, take any student loan tax credits that you earn and put those amounts toward the principal of your loan. "And any time you earn or receive extra funds, put them to work by making extra payments or making larger payments," he notes.
Overall, find a way to stay within budget and live below your means, Fox advises. "Whether that means working two jobs, having multiple roommates or living without a car if it comes with a car payment, there's no better time than your young adult years to build good habits and build a strong financial foundation," he says.
Worried about how to pay for your golden years? Ken Fisher, founder of Fisher Investments, and TheStreet's Jim Cramer will tell you what you need to know in a June 21 webinar on the market trends that are shaping retirement planning today. Register here for the event, which starts at 11 a.m. ET.