Graduates should put off living large after college

A few words of advice for the graduating class of 2008: When you get your first real job, you may feel rich. But don't act like it.

There are a handful of money moves you can make now that will virtually ensure your financial security -- and possibly create great wealth -- later in life. The younger you are, the greater the opportunities and the easier the wealth strategies are to execute. But if you start out spending too much, too fast, your ability to set yourself up for long-term wealth diminishes and eventually evaporates. That makes the first months and years after graduation pivotal to lifetime financial security.

"Good habits are important to start early," said Laura Tarbox, founder of Tarbox Group, a financial planning firm in Newport Beach. "Take your finances as seriously as you do your relationship and career decisions, and you'll end up way ahead of everybody else. But you've got to do it now. If you start even five years later, it just doesn't work."

The key, experts say, is a simple one: Live like a poor college student for a couple more years. While you're doing that, you can pay off your debt, start a savings plan and embrace healthy habits that will serve you well for life.

Here's how to start:

Calculate your net worth

Make a list of your assets and debts. Your net worth is your assets minus your debts.

At this point in your life, the list probably is short and depressing. The typical college graduate has virtually no assets and about $23,000 in debt -- $20,000 in student loans and $3,000 on credit cards. That's a negative net worth of $23,000.

Save your list and don't despair, said Mark Brown, a financial planner in Denver. Things will change quickly, and it will serve as a reference point.

Recalculate your net worth each year to chart your progress and inspire you to keep going.

"You have to look at where you've come from to see the progress that you have made," Brown said, "and to know that you're actually getting somewhere."

List your goals

People who record what they want are far more likely to get it, Brown said. Whether your objectives are personal, professional or financial, take a few minutes to think about what you want and when you want it, and put those goals on paper.

Revisit the list periodically to see whether your goals have changed or have been achieved. If you're not reaching the milestones you've set, you need to consider whether they were unrealistic or you need to revise your strategy.

If you are reaching your goals, give yourself a pat on the back. You've earned it.

Add up your payments

Six months after graduation, you'll need to start paying off student loans, noted Dara Duguay, director of the office of financial education at Citigroup Inc. and author of "Please Send Money: A Financial Survival Guide for Young Adults on Their Own." But many new graduates don't even know how much they owe until they start getting the bills. By then, some have locked themselves into other monthly expenses -- a lease on an apartment or a car, for example -- that make paying debts difficult.

Before you make any new financial commitments, find out how much you already owe, the interest rates on your debts, your minimum monthly payments and the terms of the loans.

You'll then be able to figure out how much of your disposable income will have to go to paying your loans and how much you'll have left for other spending -- including paying more than the minimum amounts due.

Prioritize your debts