Pity the college graduate. After spending four years with his head buried in books (or, more likely, beer cans), he emerges, blinking, into a harsh world where financial savvy means far more than knowledge of Thucydides or "Beowolf."
Meanwhile, he doesn't know how to balance a checkbook.
It's not a pretty picture. But it's not an uncommon one, according to Frances Smith, vice president of American Financial Services Association, a Washington-based non-profit foundation.
"After people have been living on campus or at home for a number of years, where most of their financial concerns were taken care of by someone else, entering the real world can be a big shock," said Ms. Smith.
With more and more recent graduates saddled with heavy student loan payments, that sort of ignorance can prove especially dangerous.
"People might be starting out in their new jobs with monthly debts of $200 or $300," Ms. Smith said. "Their take-home pay might barely cover that and the essentials. So they really have to be careful about how they spend their money."
For those who know more about GPAs than gross incomes, here are a few tips to ease the transition into the real world:
* Create a budget. Calculate your basic monthly living expenses and compare them with the amount of money you're bringing in every month. If you come up short, cut back in areas such as entertainment, clothing and long-distance bills.
To help with your budgeting, track your expenses for a period of time, especially if you're confused about where your money is going. Look at budgeting as dieting, Ms. Smith advised. Set spending goals and try to stick to them. If you splurge one day, cut back the next.
That's a course Cindy Sherman follows. Ms. Sherman, 26, earns $20,000 per year as a systems administrator at Milner Fenwick Inc., a Timonium-based firm producing videos on topics such as reducing high blood pressure. Occasionally, she finds that she's spending beyond her means, whether it's on baby-shower gifts or tickets to a comedy show for her family on Mother's Day.
When that happens, Ms. Sherman, a 1990 graduate of the University of Maryland Baltimore County, institutes a "spending freeze." For a month or two, she won't permit herself to use her credit cards.
"I also just try to stay away from stores," said Ms. Sherman, who lives with her parents in Reisterstown.
* Set aside a certain percentage of your salary every month for savings.
After graduating from Williams College in June 1990 and getting a job soon thereafter as a loan officer for Maryland Home Mortgage Corp., Hassan Murphy decided he wanted to save $14,000 toward law school over the next year. Mr. Murphy put 50 percent of his commissions from the Lutherville-based company into a savings account.
"When the money came in, I treated it as though it were already committed, as though I had a bill to pay," said Mr. Murphy, who lives with his family in Mount Washington.
Although he was often tempted to stray from his plan -- for clothes or a compact disk player -- the system has worked. When Mr. Murphy begins attending law school at Georgetown University this fall, he'll have more than $14,000 at his disposal for living expenses.
For those who lack such willpower, forced saving can be a good option. It involves the automatic withdrawal and transfer of a certain amount from your pay to a savings or investment account. To arrange this, talk to your employer and your financial institution.
* If you're going to live in an apartment, shop carefully for one that fits your budget and living needs. Look for an affordable area that isn't too far from work. Realize that your landlord will usually ask for either a security deposit, typically a month's rent, or for payment upfront for the first and last month of the lease.
Before signing the lease, review it carefully so that you'll know what the security deposit covers and under what circumstances it will be forfeited.
Calculate your utility bills. Find out what the average monthly payment has been for heat, gas and electricity, as well as charges for "high" months. Some landlords include utilities in the rent, while others meter them separately. You may be required to put down a security deposit for certain utilities.
* Furnish wisely. "Until you get more established, used furniture makes a lot of sense in terms of cost and durability," said Ms. Smith. Garage sales and thrift shops are often good sources of used furniture. You might also check out some of the stores selling cheaper new furniture, such as IKEA.