Graduating from school can be an exhilarating experience. You are finally done with your education, you have a job (hopefully) and you are living on your own. It is important to start out on the right track with your personal finances in order to avoid running into trouble later.

First of all, make sure that you have health insurance. If you are young and healthy, you may not think that this is very important. But you never know when you may become ill or sustain an injury, and if you are not adequately insured, you can incur major expenses that will be a burden to repay. Your workplace may offer health insurance, but if not, you can purchase your own policy or stay on your parents’ policy until you are 26. Whichever option you choose, make sure that you have health insurance.

With each paycheck you receive, you should put some money away in savings. The easiest way to do this is to set up payroll deductions in which a certain amount of money is automatically deducted from your paycheck and deposited in the institution and account of your choice. Alternatively, you can make the transfer yourself after you receive your paycheck. Whichever method you choose, be sure to get into the habit of saving money from each paycheck.

Because you never know what surprises life has in store for you, it is wise to build an emergency fund that contains enough money to tide you over for three to six months. This money should be kept in a money market or savings account that is easily accessible, so that if you lose your job or become ill or disabled for a time, you will be able to pay your living expenses.

It is never too early to start saving for retirement, and the sooner you begin, the more money you will have when the time comes. Plus, the earlier you begin, the sooner you may be able to retire. Setting up a Roth IRA is an ideal way to save. You can contribute up to $5,000 per year, and you can invest it in stocks, bonds, CDs and other financial vehicles.

If your employer offers a 401k with any matching contributions, you should definitely take advantage of it. The way this works is for every dollar you contribute to your 401k plan, your employer will match it at a certain rate up to a certain maximum. This is like getting free money, so you should always contribute to your 401k at least the amount that your employer will match.

If you have accumulated credit card debt, do your best to eliminate it as quickly as possible. Pay off your cards with the highest interest rates first, as this will save you the most money over the long term.

Devise a budget and adhere to it. Make a list of your expenses, including rent, utilities, gasoline and so on. Be sure to budget for leisure activities and unexpected expenses too. Once you come up with a budget, try not to deviate from it. After all, the point of having a budget is to make a workable plan for spending and saving your money.

As you enter life as an independent person, you are bound to have many experiences, some good and others not so good. But if you have your personal finances under control, at least that will be one thing that you will not have to worry about.