So you graduated. Now what?

When 22-year-old Cole Finnbogason graduated from Western University in June and landed a job, he celebrated in his own way.

He didn't splurge his first paycheque on buying a car or a new suit. Instead, one of the Richard Ivey honours business administration graduate's first stops was his bank, where he met with an account manager to map out a financial plan.

"I knew I was going to have a regular paycheque coming in, so I wanted to make sure I made the most of it," said Finnbogason, who works as a lecturer at his alma mater in London, Ont.

"When I was in school, my finances were more about getting by and less about how financially sound I was. Now that I'm in the real world, it's a major priority for me."

But not all young Canadians take the same steps after landing their first job.

For many recent graduates fortunate enough to get hired in today's tough labour market, suddenly earning a salary tempts people to spend, spend, spend, simply because they didn't have the luxury to do so before.

It may be an exciting time, but if young adults aren't careful during this crucial transition from student life to adulthood, it's easy to develop bad habits -- and dig yourself into a huge financial mess, said Alim Dhanji, a certified financial planner at Assante Financial Management in Vancouver.

"It's a whole new world," Dhanji said.

"It's challenging, because students are not used to having to make a budget or worry about finances.

"You have to grow up financially pretty quickly."

Part of that growing-up process usually means going from living off student loans to suddenly having to organize personal finances to work toward meeting financial goals.

It's a time when goals such as paying off debt, saving up for a house or a wedding, or starting a business comes into focus, Dhanji said.

One of the biggest mistakes Dhanji sees young adults make when starting to bring home the bacon is the accumulation of more debt. "It's easy to get caught up with society, which encourages us to spend more money and take on debt," he said.

As a first step, create a budget and distinguish between what you need and what you want.

Think about your top goals for the next five years and beyond and decide which purchases fit into your plan, says Mike Henry, Bank of Nova Scotia's senior vice-president and head of retail payments, deposits and lending.

That may mean tracking spending with tools as simple as writing down every purchase in a notebook, to creating a computer spreadsheet.

Cole Finnbogason, for one, uses budgeting websites and mobile apps such as Mint.com .

The online service helps organize all of his financial accounts in one place, allows him to set targets, make a budget and track his own spending.

"I've noticed I'm spending less on recreational stuff and going out with friends," Finnbogason said. "I always tried my best to put money away, but now I feel I do it even more so with full-time employment."

Henry also recommends people who are just starting work to check their wallet: Are you holding onto a childhood savings account that no longer suits your needs?

Is your credit or debit card right for you, and is it giving anything back?

"Look into cards that offer rewards for your everyday spending, such as Scotiabank's SCENE debit and credit cards, which allow you to earn rewards for free movies," Henry said.

"As you hit adulthood, there are a broader array of services that you can take advantage of. You have to make sure that as the complexity of life goes up, so does the relevance of your financial solutions."

-- The Financial Post

Republished from the Winnipeg Free Press print edition August 23, 2012 B8