Students graduating today are entering a far more positive economic environment than many of their parents. Unemployment is at its lowest point since 2000, hitting 3.7 percent in September, 2018, according to the U.S. Department of Labor.

Over the last 10 years, laws have changed, meaning that banks have more of a “safety cushion” than in previous years – regulations now protect them from losing money due to bad loans and excessive optimism.

Despite a good economy, the smartest people, are not necessarily the best money managers. After all, Elon Musk, CEO of Tesla and founder of SpaceX, has $10 billion of debt. Even with his intellectual aptitude, degrees in physics and being listed on Forbes’ list of youngest billionaires, he owes the Securities and Exchange Commission millions of dollars. 

In addition, many high-paid athletes, due to their lavish lifestyles, do not have a sustainable level of wealth – sixty percent of former NBA players were broke within five years, according to a Sports Illustrated report. It’s easy to get caught up in America’s consumption-based society.

My advice to graduating college students: guard your financial safety cushion. That takes more than just being well-educated, hard-working and having a high annual income.

Maintain a good credit rating, because FICO credit scores can affect many areas of your life. Check the history and accuracy of your credit rating with sites likeCredit Sesame – your score can have a significant impact on your ability to purchase high-priced essential items and receive loans at a low interest rate.

Learning to save money is also crucial to financial success. Even a small amount, set aside consistently over the years, can add up to a huge amount of savings. When you get your first job, took into automatic deductions, in which your employer automatically reserves money in a separate account which will be put toward your retirement.

Try to reduce your gross taxable income, which is all your income earned that helps the Internal Revenue Service (IRS) calculate how much you will pay in taxes. Your goal in life should be to keep as much of your hard-earned income as possible, and not give it unnecessarily to the IRS. Make the most of tax credits and shrink your taxable income on a dollar-for-dollar basis. Tax credits can be things like education expenses, so the more you spend on your education, the less money you will owe.

It’s also never too soon to begin saving for retirement – even as a college student. Open a Roth IRA account which allows you to pay all taxes on the money when you open the account, and then you’ll never have to pay taxes on the account again, meaning that you can invest this money instead.

Next, try to avoid a car payment by not leasing a car – you will have all the expenses of car ownership, but are also paying for something you’ll never own. There are many previously owned cars available through companies like Autotrader or Cars.com that are reliable and don’t have many miles.

Finally, try to have more than one retirement check. In an ideal world, you should get a job in private industry at the beginning of your career and pay into Social Security. Get as many of the maximum 40 units of credit banked into your account. After doing this, get a job in the public sector, like government jobs.

What this means is that you will be paying into a brand-new retirement account that will have much better benefits than Social Security, and can be up to four times the amount of your Social Security check. If you also have a Roth retirement account, this is an added bonus.

There can be much pride, joy and satisfaction in your journey toward financial freedom. The secret is to have economic goals and follow a plan.