Graduating from college can be an equally exciting and stressful time.
Many graduates are getting ready to go out on their own for the first time, and hopefully starting a job they're interested in. But adulthood can also come with come with a mountain of responsibility, from paying your own bills to deciding where to live, which can can be overwhelming to navigate all at once.
But as a young adult, you also have the opportunity to set yourself up for long-term financial success by developing good habits and getting ahead of potential missteps.
Here are four recommendations from financial experts to help you build a solid financial foundation.
1. Build an emergency fund
Money experts routinely emphasize the importance of having an emergency fund. It's smart to be prepared when an unexpected expense comes up — say, your car breaks down or your pet needs to go to the vet — so you don't have to rely on credit cards or other high interest debt.
"I'm a big proponent of emergency funds — saving just to save for a rainy day, because those rainy days do happen in many different ways," says Adrienne Davis, a certified financial planner with Zenith Wealth Partners.
Davis recommends young grads familiarize themselves with the concept of "paying yourself first." That can mean setting up automatic contributions to your savings account whenever you get paid, rather than waiting until end of your pay period to see if there's anything left over.
"If I don't have enough money to go on this trip or go out to this fancy restaurant because I've saved [first], at least I know I made that responsible decision instead of not having that savings," Davis says.
Financial experts commonly recommend having enough cash to cover three to six months' worth of expenses set aside for emergencies. But if that goal feels out of reach when you're just starting out, remember that every little bit you can put toward it helps.
2. Keep lifestyle creep in check
When you start earning a full-time salary, it can be tempting to go do all the things you couldn't do on a college student's budget. But "not being intentional about their spending" is a mistake newly minted grads would be wise to avoid, Davis says.
Lifestyle creep often happens when individuals decide to make lifestyle upgrades when they start making more money. Despite a higher income, habits like buying better groceries or nicer clothes can quickly make the pay increase feel negligible.
New grads may be especially susceptible to this phenomenon because many of them are making a full-time salary for the first time in their lives, says Haiyan Huang, chief credit officer at fintech firm Prosper.
To avoid lifestyle creep, Huang recommends figuring out what your finances look like after you've met financial obligations like student loan payments before spending freely in non-essential areas. Davis encourages young adults to use a budgeting app or a similar tool to track their spending and understand where their money is going.
"I didn't start using [an app] until maybe two or three years into my career, and I think about all the money that I was just spending frivolously because I had no idea or concept of how much I was spending and how much things cost," Davis says.
3. Start investing ASAP
Though retirement may seem too far away to worry about, it's imperative for young adults to take advantage of their youth and start investing as soon as possible, financial expertssay.
"It's never too early to start investing. You're never too young," Gargi Chaudhuri, chief investment and portfolio strategist, Americas, at BlackRock, previously told CNBC Make It. "Every single year you miss out on could be potentially quite costly from a compounding standpoint."
If your job offers a 401(k) plan, Davis recommends contributing right away. "Don't complain about it. Don't think, 'Oh, it's $300,' or whatever it may be," she says. "You will not regret it."
It's OK if you're not able to invest much right away — when you're young, you have time on your side. Anything you're able to put into the market through your 401(k), individual retirement account or other brokerage account has time to grow with compound interest.
A 25-year-old who invests $100 a month and earns a 7% annual return would have around $380,000 at age 70. But if they started just five years later at age 30, their investment would be worth around $260,000 at age 70, according to CNBC Make It calculations.
"The earlier you get [invested] and allow your money to grow, the more growth that you actually will see," Davis says.
4. Consider making trade-offs
Part of being a financially savvy adult is understanding that money management often comes with difficult trade-offs. Especially when you're fresh out of college and want to do things like live on your own, buy a car or move to a new city, it's important to consider what compromises you may have to make to do so, Davis says.
"You may not want to have a roommate and feel like this is your time to be independent, or you may not want to go live with your family, if that's an option, but we have to think about your future self," she says. "Are you going to be accumulating debt if you don't have a roommate or if you're living in a really expensive apartment versus if you did the alternative?"
As you're making a financial plan or figuring out how to stick to a budget, Huang suggests writing down your expenses to get a perspective on what you're able to do with your money.
"It's beneficial for you to keep the numbers in your mind and then that helps to make financial decisions from day-to-day social activities or lifestyle spending to long-term financial planning," she says.
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