Stretching a starting salary is tough work. Recent college grads often are just learning to manage their own finances at a time when they're bearing the cost of setting up their first homes and making student loan payments. This year's graduates face an average loan debt of $24,000 before they collect their first paychecks.

It all makes for difficult choices about how to maintain a desired lifestyle, while paying bills on time, reducing debt and setting aside enough money for emergencies and retirement.

Here are five steps to help get on the right financial track early on.

It's a mistake to think of a budget in terms of deprivation or what you can't spend. Learning to live within certain limits can help you save effectively to achieve certain goals.

The thought of budgeting tends to make people's eyes glaze over because they think they'll have to spend hours at a desk, says Gregg Wind, CPA, partner at Wind & Stern LLP, in Los Angeles.

However, budgeting tools, ranging from free online worksheets to computer software, can make the task much easier.

Budgeting helps eliminate the anxiety of wondering whether you have enough money and it makes it more likely that you'll achieve your goals, Wind says.

Quicken is a popular software program that costs around $30 for basic editions. Free online budgeting tools are offered on various sites, such as, www.moneystrands.com and www.mint.com .

It can be difficult to decide how to spend your money when there are so many competing demands.

Still, it's important to remember the advantages of beginning to save for retirement early. A primary benefit is that of compounding interest, or the process of earning interest on interest. This will grow the account faster the more years you're invested.

But shedding college debt takes a serious commitment, too.

"You might want to take a look at where your money is getting its best usage," Wind says.

It makes more sense to pay off a student loan costing you 6 percent before piling lots of money in a savings account earning just 1 percent because it's costing you more to have the debt, he says.

However, the need for recent graduates to save some of their income shouldn't be overlooked.

Right off the bat, new grads need a car, a place to live, and a plan to reduce whatever credit card or student loan debt they've accumulated while in school, says Eleanor Blayney, consumer advocate for the Certified Financial Planner Board, the group that grants certification to financial planners. But the list doesn't end there. "You'll need a reserve fund to support you if you lose your job, or have to relocate for a new one," she says. "In short, you need cash in the bank before you need shares of Apple or Google."

Prioritizing needs ahead of wants is critical for young workers just getting started on their own finances, Blayney says. Generally it's advisable to maintain emergency savings of at least three to six months of living expenses.

Retirement may be low on the list of concerns for young workers. However, if their employer offers a 401(k) match, they should set aside enough from their paycheck to receive the additional funds. The most common match is 50 cents for each dollar saved, up to 6 percent of pay.

Taking this step entitles you to essentially free money from your employer, and offers the additional benefit of reducing your taxable income because the money is taken out before taxes.

It's important to get in the habit of saving for retirement early. "There are not many better deals out there" than the company contribution, says Beth McHugh, vice president of marketing insight at Fidelity Investments.

If your budget is tight and there's a need to cut costs to make ends meet, review your student loan repayment options. Some federal loans allow payments to be adjusted based on income. Remember, however, that reduced payments will extend the term of the loan and will end up costing you more in interest in the long run. So only use this option if necessary and boost those payments back up as soon as possible.

Some loans charge a reduced interest rate if you sign up to have payments automatically deducted from your paycheck. Sallie Mae loans, for example, typically reduce interest by 0.25 percent, says spokeswoman Patricia Nash Christel. Over a 10-year loan that could save as much as $500, she says.

Consolidating debt is another way to reduce expenses. Debt consolidation wraps up smaller individual loans into one large loan, usually with a longer term and a lower interest rate to help reduce monthly payments.

If you're thinking about borrowing money, think about whether you're taking on debt for something that appreciates in value, says Blayney, the consumer advocate.

The best reason to borrow money is to pay for something that appreciates over time, as opposed to losing value or depreciating.

For instance, student loans are often referred to as "good debt" because education is an investment in human capital that should pay off in increased earnings in the future. Another example is a house.

Cars, however, depreciate in value, so borrowing to buy one only makes sense if the car is necessary for your employment or building a career, she advises.

Educate yourself about personal finance. It's a good idea to seek the advice of trusted friends or family members to get advice on the budget and the spending priorities you've set.

If you can afford it, see a financial planner to help set up your initial budget. Once it's set up, you may not need to see the planner again for a few years if everything's working.

( Source: Associated Press )