When you graduate from college, figuring out how to manage your money can feel overwhelming.

The good thing is, there are only a few decisions you need to make to set yourself up for success. You need to know how to spend your money wisely; how much to save; how to invest, how to build credit, and what to do about debt.

If you take these five steps, you'll put yourself on the fast track to a secure future. 

Young person looking at financial paperwork.

Image source: Getty Images.

1. Living on a budget will help you spend mindfully

One of the first things to do after graduation is to set a budget. This will ensure you're in charge of where your money goes so you're using it wisely. 

When you're budgeting, aim to keep fixed costs below 50% of your income. This includes costs for things like housing, car payment, and other basic essentials. Set aside 20% for savings, and use the remainder for discretionary expenses.  

You can make a very detailed budget assigning a job to every dollar if you must do that to keep within these spending limits. Or you can just live within this broad framework with a 50/30/20 budget if you don't find yourself overspending.

The important thing is to make and live on a budget that follows these guidelines right after college before you commit to expenses or get used to a standard of living that's not sustainable over the long term. 

2. You should set specific financial goals

As a new college grad, it's time to start working on accomplishing big financial achievements, especially as some of them could take decades to fulfill. Setting specific goals will help you ensure you're devoting enough of your money toward things that matter.

It's a good idea to have short-term and long-term goals, including things like saving for retirement, a home down payment, a car, or a vacation. Be sure each goal you set is specific (with a detailed dollar amount) and has a time deadline so you know how much money to budget each month to make it happen. 

Once you've established your goals, begin working toward them. Ideally, the best way to do this is to make the process automatic. If you want to contribute $100 a month toward your emergency savings account and $400 a month to a retirement account, set up those contributions to come right out of your bank account on payday so you can't spend the money instead. 

3. Start investing early to set yourself up for success

When you've just graduated from college, you most likely have the most powerful wealth-building tool of all available to you -- and it's not your degree. It's time.

If you begin investing at a young age and invest even small amounts, you have time for compound growth to work its magic. A small investment can earn returns that are reinvested, so you then earn more returns that can be reinvested. When this process happens over decades, you can build wealth with minimal effort.

Say you start investing at age 21 and put $250 a month into an S&P 500 fund. The S&P 500 has consistently earned 10% average annual returns over the long term, and fees on these funds are low. If you invest that $250 for 45 years until you are 66, you will have over $2.1 million as a retiree. By contrast, if you wanted the same account balance but started saving at 35, you'd need to contribute close to $1,000 monthly.

Do not waste the chance to start building wealth early. Start investing the minute you graduate even if it's only a few dollars here and there. 

4. Work on building credit ASAP

As a new grad, it's also a good idea to start working on your credit score if you haven't already. Your credit score will affect how much your mortgage and other big loans cost you. It will also impact you in other ways, such as by influencing your auto insurance rates. 

You can build good credit by slowly taking on a few different kinds of debt, such as a credit card and car loan, and by showing you can pay responsibly. Keep your credit card balance to 30% or less of your available credit, don't take on too much new debt at one time, and make all your payments on time to start earning a credit score that opens doors for you. 

5. Be strategic about how you use debt

Finally, try to commit to avoiding high-interest debt.

You can use credit cards to earn rewards but pay them off in full each month. Otherwise, aim to borrow only for things that increase your net worth, like buying a house or starting a business. If you don't get into the habit of relying on debt, you're less likely to need to borrow later because you won't have interest payments eating up your income. 

These five tips will help you create a stable financial life post-college and set you up for building real wealth that will give you a secure future.