This advice comes as more than one million Americans will soon graduate with substantial student loan debt averaging $26,500, according to a report from the National Conference of State Legislatures. They will join the millions of grads from prior years who collectively hold more than $1 trillion in student loan debt.

“The reality is, despite having earned a college degree, the majority of these graduates have little to no knowledge of how to manage finances,” stated Steve Trumble, President and CEO of Boston-based American Consumer Credit Counseling. “The way young Americans spend and manage their money now can determine the rest of their lives, and it’s alarming at how many lack basic personal financial literacy.”

According to a recent study from the American Institute of CPAs, about three-quarters of student loan borrowers surveyed said they — or their children — have been forced to make sacrifices in order to keep up with student loan payments. This includes 41 percent who have delayed retirement, 40 percent who have put off buying a car, and 29 percent that have postponed home purchases.

“From the very first day grads walk off the college campus they are already, on average, nearly $30,000 in the red – making it significantly challenging to pursue the career they want or even achieve some of life’s major milestones,” continued Trumble. “Undoubtedly there is a student debt epidemic in the US, but all hope is not lost if graduates tackle debt early and understand the importance of saving.”

Here are five essential money lessons to apply and make a part of their daily personal finance habits:

1. Pay down debt while you’re young and capitalize on the debt you have

Even though student loan debt is often considered “good debt,” it is important to begin paying it down as soon as you possibly can. While it may seem tempting to defer your loans or pay the absolute minimum, it will not help you in the long run. In addition, student loans are one of the best ways to establish and build your credit worthiness. So, when it does come time to purchase that vehicle or home you’ve been saving for, you have the score to do it.
This blog post outlines different repayment options: http://talkingcents.consumercredit.com/2013/04/25/student-loans-oh-so-many-repayment-options/

2. Protect your credit profile

Your credit score allows lenders to measure your ability to handle your money and repay your debts, which in turn determines the interest rates you pay for your car, mortgage, credit cards and even rent. Building up a good credit score through smart tactics such as paying the full balance of your credit card and other bills on time each month will save you thousands in interest payments over the long-run.

3. Start saving now for retirement

Not investing in a 401(k) plan is turning down free money, plain and simple. An employee-sponsored 401(k) lets you purchase stocks, bonds, and mutual funds with pre-tax dollars. This money can compound for decades without your having to pay a dime in taxes. Putting off saving for retirement is one of the most common and worst mistakes that any young American can make.

4. Stick to the “starving college student budget.”

When you receive your first “real-world” paycheck, it will be tempting to treat yourself to everything you sacrificed in college. That is why it’s important to understand what a budget really is – balancing your income and monthly expenses. Developing a good budgeting process now will ensure that this carries through in your later years.

5. Create an Emergency Fund

For many recent grads just starting out, there is barely enough left in the paycheck at the end of the week to buy gas. So, setting aside money for an emergency fund may be unrealistic. However, saving even as little as $5 per week can pay itself back dividends should the unexpected occur – job loss, medical bill, car breaking down. Once you begin making more money, start setting aside the recommended 10 to 15 percent of your paycheck.