For many young adults in their early twenties, financial independence occurs when they secure their first full-time job, often following a four-year college degree or other source of education. While this is an exciting time, it can also be stressful trying to learn how best to adapt to novel financial responsibilities. Regardless of what you do, your first full-time job should provide a significant increase in the amount of money you have in your pocket. You will have to learn to manage your money smartly in order to pay off any debt you may have, start setting aside money for purchases such as a house or a car, and eventually, investing in your retirement.

Create a Monthly Budget

When you’re in school or dependent on your parents, your finances were probably fairly simple. Perhaps you paid for rent, utilities, and a percentage of your tuition. Now that you will be receiving a paycheck on a regular basis, you may have some additional financial freedom. What are your goals? Would you like to buy a car, move into a nicer apartment, or start saving for a house? Moreover, do you have debt to pay off now that you are earning? A budget is a way to manage these priorities in an organized way. Creating a budget as soon as you start getting paid is crucial if you want to control where you spend your money and avoid financial woes later in life.

Address Debt Right Away

Being able to pay off debt may be the least exciting aspect of getting a paycheck. Unfortunately, it’s the most necessary one. Tackle your debt, including student loans or credit card debt as soon as possible. Ex-students generally receive a six-month grace period before their loan requires repayment. If you already have a job, don’t wait – start paying off your loan with your first paycheck. You will need to settle on a reasonable amount to pay each month and factor it into your budget. This is also a good time to get into the habit of paying off your credit card bill in full every month, in order to avoid paying hundreds or even thousands of dollars in interest payments as the years go by.

Start Saving

Just because you now have a regular source of income, doesn’t mean you need to up your spending. While you may want to allow yourself some financial luxuries every now and then, it’s best to remain frugal for a few years while you build your savings.

Set aside a percentage of your paycheck – whatever you can reasonably afford – each month. If you can, make the transfer into your savings account automatic so you’re not tempted to spend. Once you get into the habit of putting aside a certain amount, you won’t even notice it’s gone.

Plan for Retirement

When you’re just starting out working, retirement is probably the last thing on your mind. Sure, you probably have a few decades before you’ll call it quits, but that doesn’t mean you can’t start saving now. The good thing is that the longer you save for, the less you’ll have to put away on a regular basis. Even small amounts of money can grow in the long-term. Consider paying into a retirement savings plan if your employer offers one.