The following article has been written by Barbara Delinsky.

Graduating college and entering the hard-hitting mainstream workforce can feel like total mayhem. After all, you will now have to pay for a new set of expenses. Your most beloved buddies are no longer a dorm room away; they have moved on to different parts of the country and maybe other locations across the globe. And you must now actively meet a new set of obligations: paying for the house’s rent, looking for a stable job and saving for your retirement.

It’s certainly overwhelming, but achievable nonetheless. There are some typical budgeting mistakes  young professionals make. If you can stay away from them, then you can surely get past the initial setbacks and take charge of your finances efficiently.

Giving in to Lifestyle Inflation

As a recent college graduate, you might be planning to buy a nice new car, find a fancy new apartment, purchase pricey home interiors and so on and so forth. Not only may these expenses be unnecessary for you at the moment, it is very likely that you won’t appreciate them for very long. There’s a popular theory known as the “hedonic treadmill“. It’s quite natural for human beings to unnecessarily upgrade their lifestyle too often.

But that high-end gadget you longed to buy will gradually start to blend in with your home’s present interiors, along with your other sophisticated self-indulgences. Instead of usurping your monthly income to buy newer luxury items, why don’t you spread out the costs over a certain period of time?

Owing Too Much Debt

Excessive amounts of debt means spending a great deal of money on interest and fees. Ignoring your debt obligations only makes things worse; the longer you’re in debt, the longer you’re unable to spend your money on the things you really want.

On the other hand, because of the Great Economic Recession of 2008, a lot of young adults have developed a belief that credit is bad outright. Staying away from all lines of credit altogether may actually hurt your credit rating. Therefore, the strategy here should be to build your credit history methodically, and not in a hurry, by opening one or two accounts in your name at a time. Still, you’ll have to pay off all your dues on time.

Kristin’s note: I’d like to highlight Barbara’s point about paying off credit cards in full and on time. When I graduated, I was excited about the prospect of a new career, so I charged a bunch of Stuff to a new credit card. Spending money I didn’t have was a big mistake.

Proctastinating Your Saving

It is natural for you to feel as if your current income isn’t enough to build a retirement fund, let alone save for an emergency. However, this is considered to be the most opportune time to start saving. If possible, at least one-fourth of your monthly paycheck for future goals should be saved, especially for your golden years. Your foremost priority at the moment lies in having a solid emergency fund with around three months’ worth of your present living costs saved. This savings fund will help you overcome life’s various hiccups–a car accident or a sudden root canal, for example.

After that, you’ll have to save money to build-up your nest egg. You should always take advantage of an employer-sponsored benefit plan, like a 401(k) matching program. If you’re bogged down with the task of saving money, consider contributing a small percentage of your monthly paycheck to a money market fund or a high-yield savings account.

Developing Bad Spending Habits

If you’re living paycheck-to-paycheck and spending money on various discretionary items: expensive brunches, frequent Starbucks coffees, etc., you might be developing some bad money habits. Yes, it’s absolutely fine to indulge once in a while, but overdoing it will eventually lead to financial troubles.

If possible, start packing homemade meals to the office. You may also learn to cook your own food at home and accept the help of loved ones whenever necessary. The best part is that you’ll be able to develop a skill that will last you for the rest of your life.

Failing to Ask for a Raise

The economy is recovering, yet many employers still don’t pay employees fairly. Don’t be afraid to ask for a raise or better benefits. This is actually a positive professional attribute. It shows you are aware of the nuance of business.

A diplomatic but firm request with exuberance and appreciation may translate to additional hundreds, and, eventually, thousands of dollars of earnings in a lifetime. For that reason, you should practice your salary negotiation skills before meeting with a potential employer. Furthermore, you should study the profession you’re entering so you know what to expect.

If your salary is fixed, then you might consider analyzing the benefits–an area that’s often ignored. Consider the health care benefits and vacation time your employer offers.

Kristin’s note: I wish I’d done this before I accepted my first job. A recent study found that by failing to negotiate your starting salary, you stand to lose hundreds of thousands of dollars over the course of your career.

Money mistakes are mostly inevitable. But in overcoming or avoiding the above blunders, you’ll discover that improving your budgeting skills will lead to a more stable financial life.

This article has been written by Barbara Delinsky.

Photo by Tax Credits.