Whether it be student loans, credit cards or just living beyond one’s means, many young renters find themselves knee-deep in debt with no clue how they’re going to get back on track. To stop it before it happens, here are five basic rules every young renter should follow to ensure that they won’t be scraping to pay rent next month.

• Stay within your means. Overspending can quickly land a person deep in debt and struggling to stay afloat without maxing out credit cards or asking for help from family and friends. While you may be making more money than you ever have before, you are also responsible for much more financially. Therefore, stay conservative with your money for the first few months. You may want to even try your hand at the WilliamPaid Challenge and see just how much you can save when you spend smart.
• Set a budget. You can only stay within your means if you know what your means are. Monitor your expenditures and income for a month or so. Seriously, write down everything that you spend money on. It’s easy to take out cash from the ATM and then wonder where it goes. Then sit down and set some limits on your spending. The biggest key here, though is once you set your budget, stick to it to ensure that you’ll be financially successful. You’ll thank yourself later when you’re not begging your parents for money to cover last month’s electric.
• Pay all bills on time. Congratulations, you are now officially an independent adult. That also means that you are the one responsible for ALL of your bills. Don’t skimp on these payments, because ignoring your financial obligations will come back to bite you in the form of a bad credit score later.
• Know all the financial implications. You can no longer expect your parents to handle all of your tough financial decisions for you. Therefore, it is important that before you sign any agreement, whether it be a loan, credit card application, etc., that you understand exactly what you are getting yourself into financially, whether you can handle those obligations and the penalties should you find yourself in a tough spot.
• Plan for emergencies. You may be a diligent budgeter, but then something truly unexpected occurs. Whether you break your arm or your car needs new tires, expect the unexpected by putting some money away each month for your rainy day fund. While you might be a little unhappy about missing the movies one month, you’ll be thrilled when you have an umbrella when it starts to pour.

While becoming financially literate takes practice and diligence, using these five rules will help you on your way to becoming a financial pro. What other financial rules do you use to stay out of the red?