Like Tim, many new college grads have plans for their first paycheck. After four years of boxed macaroni and cheese dinners and lumpy sofas from resale stores, full-time employment promises a better lifestyle. But while a few big initial purchases are okay, experts warn against spending too much too fast.

"It's easy in a first job to focus solely on short term wants and needs," Robert Waltos, Director of Career Recruitment for Northwestern Mutual Life Insurance, said. "But graduates who look ahead and plan for the future will lay the foundation for years of financial success."

Author Adriane Berg calls the post-college period "Your Wealth-Building Years." In her book by that name she writes, "Those who have financial control will emerge (from their 20s) with excellent financial planning habits and with a substantial sum they can build on for the rest of their lives."

Establishing good financial habits may be more difficult than it sounds. College graduates are vulnerable to missteps, especially if that first job is also their first stab at financial independence. Five common mistakes include:

• Falling for the allure of credit cards. Sometimes a flood of credit cards begins arriving even before the diploma is in hand. While on the surface, the cards may seem like "free money," interest rates are usually high. The best course is to treat them like cash. If you don?t have the money, don?t make the purchase.

• Missing out on company-sponsored savings packages. Students who are lucky enough to land a job in a company with a full benefits package should take advantage of all the offerings. Plans like a 401(k) provide tax-deferred savings. In some plans, companies match an employee?s dollars as a way to encourage savings. Human resource representatives are usually available to help explain the choices.
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• Disregarding insurance coverage. It's never wise to wait for an emergency to see if your insurance is adequate. Many insurance agents are willing to explain details and provide information at no cost or obligation if you?re unsure of your coverage or don't understand the terms.

• Establishing no savings or keeping too much savings in cash. Some experts recommend "paying yourself" a fixed amount each week or month and depositing it in a special money market or savings account. This "liquid" account -- with ready access in case of an emergency -- should contain just enough money to cover about three months of living expenses. Stocks, mutual funds and other vehicles with a higher rate of return should be used for additional savings. Many banks and brokerage houses can provide advice and information.

• Living a champagne lifestyle on a beer budget. Living beyond one's means often stems from a lack of understanding of how far a paycheck can stretch. A budget can provide a clearer view of where money is going and how much is available each month. Establishing a budget need not be a difficult or tedious task, however. A plain piece of paper, with "Income" on one side and "Expenses" on the other can be used.
  
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