For college graduates who have their first job, that first paycheck can seem like a lot of money after living frugally while in school.

Grads are finding a new favorite day in their post-college life: payday .

The average starting salary for the class of 2012 was $42,569, according to the National Association of Colleges and Employers. For cash-strapped students, these might seem like a lot, but if they don’t budget carefully, they risk squandering away their hard-earned money and sinking into debt.

Grads face a slew of new expenses like rent, food, clothing and entertainment and a majority of new graduates have at least $28,000 in student loan debt, according to the College Board. The quicker a plan is put into place, the more financial stability there will be down the road.

“When they have an idea of what that check’s going to be, build out that spending plan before that money gets thrown into life,” says Joseph Montanaro, certified financial planner at USAA.

Spending more than you earn is easy to do, but a budget will force you to calculate your income streams and compare them to your expenditures. When creating your budget, experts advise detailing all your daily living expenses like food, shelter, gas and any other staples, mapping out and pricing any future goals like vacations, retirement and weddings, and also budgeting for savings to cover any unexpected costs.

“Needs come first,” says Ted Sarenski, certified public accountant financial planner and CEO of Blue Ocean Strategic Capital. “You still have to have today’s needs met—food, clothing, and shelter. “

Budget for necessities, limit amenities

Trying to maintain a certain lifestyle or image will lead to financial disaster. “Have appropriate expectations of what life is going to look like,” advises Montanaro. “The expectation of migrating into a lifestyle [like your parents] for many is unrealistic.”

Sarenski advises grads keep a lid on their housing and transportation costs. “When you go to a bank for a mortgage on a home, people shouldn’t spend more than 28% of their income on a mortgage.”

Rent should be less than what you’d pay for a mortgage, and don’t be afraid to take on roommates to help distribute the burden of rent and utilities.  

Keeping up with the latest technology and hottest trends is fun, but expensive. Experts say you should never go into debt over frivolous items. As a rule of thumb, food, entertainment, clothing and other miscellaneous items should be about 21% of your salary, according to USAA.

Save for now and invest for the future

You need to detail short-term and long-term goals to help create a savings strategy. “If you’re saving for equity on a house, this will reduce what you have towards retirement savings,” says chartered financial analyst Robert Stammers, director of Investor Education for the CFA Institute.

If you’re able to keep your expenses flat, any excess money, like bonuses or raises, can go towards long-term goals or an emergency fund. Gary Carpenter, certified public accountant and executive director of the National College Advocacy Group, suggests putting aside six months of income, rather than expenses, in a separate account.

Even though retirement’s 40 years away, your company’s 401(k) matching plans is free money—don’t leave it on the table if you can afford it. “You’re getting an instant return because of the tax advantage but you’ve got to be absolutely sure that you won’t need it because the penalties are high,” says Stammers. “You don’t want to stretch your budget because you’re putting money in a 401(k) account.” If there’s no room in your budget, holding off on retirement savings is an option until you’re in a better financial situation. He recommends putting money needed in the next few years in less risky instruments, like money markets or bonds, rather than equities.

Eliminate debt

“The biggest debt load is student loans,” says Carpenter. “You’re going to want to consolidate the federal student loans and fill out the application online. The term can go from 20 to 30 years depending on the loan balance.”

The monthly payment for a $30,000 federal student loan with a 6.80% interest rate and 10-year term is $345. This amount decreases to $230 when consolidated into a loan with a 20-year term. In a budget, student loan payments should be about 8% of your income, according to USAA.

Consolidation isn’t the only option though. “Depending on their job, there are opportunities for different repayment plans and [loan] forgiveness,” says Montanaro. “Look for opportunities to do the best with what may be a bad situation.”

The government offers different income-based repayment plans that make payments more affordable for lower incomes or graduated repayment plans that start with lower payments that increase every two years. There are also loan forgiveness options for those pursuing careers in public service.

Since there’s little to no yield in savings accounts, experts suggest paying down student loans or credit cards instead of saving much beyond what you need in an emergency fund. “The interest rate on your debt is the rate of return on your money when you pay it down,” says Stammers. If you have student loan debt, you have incentive to save only if you’re able to earn a higher rate on your money in a savings account than what you’re paying on the loan.

Since credit card debt has high interest rates, experts recommend using money in your emergency fund to pay these balances. “Control your spending so you don’t get the balance up anymore,” says Carpenter.