By Alan Prahl

As thousands of proud parents prepare to celebrate the graduation of their children, many students are looking forward to being on their own. Living independently is a big step. What are some things these new graduates should consider?

Have a simple budget or spending plan. Your paycheck may seem like a lot of money, but after state and federal taxes it will shrink substantially. Identify your core expenses for necessities like rent, utilities, food, health care and car insurance. Then, determine what you can afford to spend on wants like entertainment and cable TV.

Count all housing costs. Don’t sign a lease until you know all of the costs and if it fits within your budget. How much does heat cost in the winter and air conditioning in the summer?

Have car and health insurance. Many students have been covered under their parent’s auto and health insurance. In some situations, parents might continue that coverage, or it may be time for the student to pay for this. Don’t go without coverage. Factor these costs into your budget.

Plan to pay for student loans. Before you consider upgrading your car or committing to other large expenses, calculate student loan payments into your budget.

Live within your income. Don’t overspend on furnishings for your new apartment or on new clothes. Have some fun, but live within your income.

Save money for a rainy day. Smart people save money for future expenses, like car repairs, health care and unexpected expenses.

Pay your bills on time. Open your bills when they arrive and pay them on time. This helps to build a positive credit rating that can save you thousands of dollars on major purchases like a car or a home.

Begin saving for retirement immediately. If your employer has a retirement plan that lets you make contributions, start saving as soon as you can. Even small amounts of money can add up to be a lot. If you don’t have a retirement plan at work then start saving immediately in your own Roth IRA.

There is more to life than making money. Plan to have a life outside of work. Think about what is really important to you and plan to spend your time and your money in those areas.