You got the degree. But do you have a sound savings plan for life beyond college? By Janet Bodnar, Editor-at-Large June 13, 2014 A new bevy of graduates has burst out of the college cocoon. But how prepared are they to face financial challenges in the cold, cruel -- and expensive -- world outside? CNN recently interviewed me on the subject, and my answers reflect the advice that Kiplinger gives in our special Starting Out Guide for Millennials. Here’s a sampling: See Also: Our Starting Out Columns for Young Adults Q. Many young people look at you as if you’re crazy if you suggest laying the groundwork for home buying and retirement when they’ve just graduated. How crucial is it to start financial planning right off the bat? You really don’t have much choice. Assuming you’re fortunate enough to get a job soon after graduating, one of the first things you’ll likely be called upon to do is sign up for your employer’s retirement plan (if you’re not automatically enrolled) and decide how much to contribute and where to invest the money (see Free Money for Retirement). You may not have any immediate plans to purchase a home, but it’s critical to begin building a solid credit history so you can qualify for an attractive interest rate when you’re ready to buy (see How to Get Your First Credit Card and Save for a House). Q. What are some of the basic financial and investment concepts young people should grasp in the one or two years following graduation? Advertisement Most important is the time value of money, for a number of reasons. At this stage of your life, time is arguably your biggest asset. That means that thanks to the magic of compounding, small amounts set aside now can grow into big piles of cash later (see Start Saving Now). Also, when you’re investing for the long haul -- for example, a retirement that is 40-plus years away -- you can afford to take reasonable risks in pursuit of higher returns by investing in the stock market (see Start Investing Wisely). Q. We’ve heard so much about student-loan debt and the tough job market. How do new grads navigate those economic factors and still get their personal finances off to a good start? The best way to handle student loans is to set up a manageable repayment plan that fits your finances; if your circumstances change, you can always change the plan (see Don’t Stress Over Student Loans). As for the job market, be proactive about your search (see Job-Hunting Tips for New Grads and How Students Can Improve Their Chances of Getting a Job). Do an honest assessment of your skills to see if you have what it takes to qualify for jobs that are in demand. If you need to acquire additional knowledge, be a strategic student. Don’t head back to grad school (and potentially acquire more debt) unless you’re in a field that will pay off (see Advanced Degrees Worth the Debt). You may be able to acquire skills free by taking a massive open online course (MOOC), such as those offered by Khan Academy, Udacity or Coursera (see 6 Things You Must Know About E-Courses). Advertisement Q. A lot of new grads are going to ask, “How can I save for the future when I’m broke now?” What practical advice can you give them? Many new grads make the mistake of thinking, I’m living paycheck to paycheck. I don’t have money to put aside. Or they think they need to make more money before they have enough to start saving. But that never works; the more you make, the more you tend to spend. The best way to save is to have someone else do it for you: Contribute automatically to your retirement plan at work, or have your bank deposit a portion of each paycheck into your vacation account. You’ll never miss the money if you don’t see it, and even small amounts will add up (see How to Stretch Your Money).