Michael Gallagher, a recent college graduate, just landed his first full-time job. He says that while he feels fortunate to be employed, he is nervous about the prospect of moving out of his parents’ home and living on a budget.

“I have students loans, rent and I am planning to buy a car,” said Gallagher, a 25-year-old Alexandria resident. “I also know that I should be saving some money, but I don’t think that I am going to be making enough money cover all of those expenses.”

Money experts say creating sound financial health requires planning and discipline. One of the first steps, they say, is to understand the meaning of financial stability.

“Healthy finances include spending less than you make, establishing a savings habit — both in retirement accounts and outside of retirement, and using debt wisely,” said Kristan Anderson, director of retirement plan services at West Financial Services in McLean.

“People should have a mindset that they’re going to spend whatever is left after saving. They’re not going to save whatever is left after spending.” — Steve Pilloff, Ph.D., assistant professor in the School of Management at George Mason University

Annandale resident and McLean-based senior financial adviser Susan E. Hamilton adds that obtaining financial well-being includes “having a healthy cash reserves fund for unexpected emergencies and opportunities, making sure that you have adequate insurance coverage, saving and investing money on a regular basis and carefully watching/limiting your overall debt level.”

Steve Pilloff, Ph.D., assistant professor in the School of Management at George Mason University said, “Financial health is not just saying ‘ok this month I had enough money to pay my bills,’ its having a plan that lets me have enough to not only pay my bills but also save for retirement, buy a house or send my kids to college.”

SO HOW DOES ONE achieve financial health? The first step is deciding how income will be allocated. “The…most important piece of advice I have is create a budget and stick with it. [This is] easier said than done, of course,” said Catherine England, Ph.D. associate dean of the School of Business Administration at Marymount University in Arlington.

Living below your means is another key, say experts. “That’s how you will be able to save and get ahead,” said Hamilton. “Be careful of adjusting your lifestyle upward every time you get a raise or come into additional money.”

Pay down debt. “If someone has a significant amount of debt, they should make paying off balances with higher interest rates a priority,” said Anderson.

Not all debt is bad, however. They key, say experts, is to make sure one’s debt load is manageable. “Most of us can't buy a house or a car with cash,” said England. “Loan repayments [such as] mortgage or car payments and credit card payments that bring your credit card debt to zero as quickly as possible should be part of the budget.”

When borrowing, make sure the repayment plan is realistic. “Just because a financial institution might be willing to qualify you for a higher loan amount, doesn’t necessarily mean that you can comfortably afford it,” said Hamilton. “Make sure that you own your house, and that your house doesn’t own you.”

Even those like Gallagher, who are living on a meager budget, should make an effort to save. “Savings don't have to be big at the beginning,” said England. “Saving at a young age puts money to work for a longer time, and just getting into the habit of putting something aside every month helps create a cushion in the event of a crisis or for a more comfortable retirement.”

In fact, says Pilloff, saving should be a budgetary priority. “People should have a mindset that they’re going to spend whatever is left after saving,” he said. “They’re not going to save whatever is left after spending.”

Plan for the unexpected. “Everyone should establish an emergency fund of four to six months of expenses. This emergency fund should not be used for general expenses, but reserved for true emergencies like the loss of a job or a medical emergency,” said Anderson.

Try the cash option. “In the old days, we'd often advise that you force yourself to adhere to a budget by carrying only so much cash each week, say for lunches or coffee breaks,” said England. “If you knew that cash had to last for the week, it was easy to keep up with what you were spending. The ease with which we can whip out a debit or credit card makes it more difficult for us to maintain that financial discipline and stick to a budget.”