Carrie Schwab Pomerantz

Dear Carrie: I just graduated with a business degree and was lucky to find a job in Los Angeles. I'm excited, but a bit worried, too, because the job doesn't pay that much and I know it costs a lot to live in LA.

It's the first time that I've been completely on my own and money will be tight. Can you give me a heads up money-wise? I don't want to blow this opportunity. -- A Reader

Dear Reader: Congratulations on your graduation and on getting a job. The recession has made it really tough for young people entering the work force, so as you say, you're among the lucky.

And I count it lucky, too, that you want to be financially responsible right off the bat. No doubt you're going to have to make some choices. But a little planning and discipline will help you pay your bills, handle debts and still have some fun.


Your first priority is covering your bills. To make sure you have enough, take a realistic look at what you need versus what you want. Start by adding up your rent, transportation costs, groceries, utility bills, student loan payments, car payments, etc. It's always an eye-opener to see these things in "black and white," so write them down or use an online budgeting tool.

Now subtract this amount from your take-home pay. What you have left, however big or small, is what you can apply to the extras you want as well as to savings. Maybe you'll have to do without certain things at first -- go out less or buy fewer clothes -- but with real numbers in front of you, it will be easier to make smart choices.

If you find that you're spending more than you'd like, there are plenty of ways to scale back without completely slamming the brakes on fun. For example, search around for a cheaper living situation -- find roommates or rent a room in someone's house. You can also try negotiating lower rates for your cable or cell phone bill.

And there are small ways to save, too. Eating at home a little more often, avoiding excess ATM fees, and canceling memberships and subscriptions you don't use are all small amounts that add up. Lastly, if you leave your credit card at home, you won't be tempted to charge on things you can't afford.


Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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