Financial advice for recent college graduates is more important now than ever, with more people in debt than ever. Recent graduates of college have it hard in this lousy economy - not only are the job prospects very poor with unemployment over 8 percent, but people are taking on record amounts of student loan debt. Unless you teach yourself how to be smart with money and how to save and invest money, you are destined to be in debt for a long time, paying off high-interest credit cards and student loans until you die. This is not the way to go!

I'm writing this because when I graduated college, I had a net worth of -$40,000 (that's negative!) because of all the student loan debt and credit card debt I had compiled as an undergraduate. I just didn't think about these things when I was partying and having a good time in college.

Sitting unemployed and broke at home one day six months after graduation, I decided to change my life for the better. I made a huge goal for myself - completely pay off some $35,000 of debt in less than five years. By living below my means and savDebtCredit: bills.coming and investing smart, I was able to complete my goal last year (only took me 2 years to accomplish!). Now I have an even bigger goal - be a millionaire in the next five years. Here's how I was able to do all of this:

Free Yourself From Student Loan Debt

So you've graduated from college and have a large amount of student loans - now what? Hopefully you will be able to land a good paying job. It took me about a year after graduation to land that first job, and I made less than a school teacher's salary. However, I was very wise with my money, not wasting money on material possessions and paying off my highest interest student loans first.

I also taught myself how to invest in stocks and options, making decent recent in the market. I've averaged about 30 percent gains yearly in the market. I also took on a second job delivering pizzas on weekends - I made about $100 for a 5 hour shift, tax-free, off the books! I worked that job sometimes on Sunday's as well. This was a sacrifice to do, as I missed some birthday's and nights out in the city with my friends - but trust me, it was worth it.Student LoansCredit:

Here are a couple of other things I did personally to free myself from $40,000 of student loan debt:

- Live with your parents rent-free, if you can: If you are able to do this, I would recommend staying at home for a couple of years to focus on paying down your debt and compiling some savings. I'm sure your parents will be happy to have you back home! This will save you $700 or so a month on living expenses - money you can use to pay off your debt or invest in the stock market. Also consider the money you will save on food, laundry, utilities, etc. Strongly consider it.

- Teach yourself how to invest in stocks and options: Visit free website like the Motley Fool, Seeking Alpha and Stockhouse to learn about different ways to invest, to grow your money each year. You can also go down to your local library to read some of the best books on investing and making money. Check out my top 5 favorite investing and money books here.  They have helped me tremendously, keeping me motivated and focused!

Investing in stocks and options involves risk, but if you know what you're doing you can certainly make a good deal of money. Also, when your money sits in a bank account, you are making almost zero interest on that money. With inflation at 3 percent, that means your money will lose that much in value each year in a bank account. However, if you invest in stocks, you can expect to make more than that amount on average. For example, the S&P 500 index was up 26 percent in 2009 and 15 in 2010. Much better than zero percent! You can teach yourself how to invest in blue-chip dividend stocks or ETF's , or if you want more risk you can learn about small-cap stocks and options. I would advise against most Mutual Funds, as they tend to carry high expense ratios.

- Pay Off Your High-Interest Rate Credit Cards:  There is nothing worse than having credit cards that have a lot of money on them, with a high amount of interest. You should NOT pay off your credit cards by paying the monthly minimum each month - this is what the credit card companies want you to do! They want you to pay it off your whole life so you end up paying much more in interest. Try to pay off your highest interest rate credit cards first - then work on your high-interest rate student loans. When you are finally done paying off your debt, the feeling is complete freedom! It will be worth it.

- Live Below Your Means, Do Not 'Keep up With the Joneses': This is perhaps the most important point I'd like to make here. As a recent college graduate, it can be hard to not want to be like your spend-thrift friends. They get a job, then immediately buy a new car, rent a nice apartment, buy new clothes, etc. This does NOTHING to solve your debt problem and will put you in a lousy situation in the future. Buy an old Honda Civic! Wear your old clothes and be content with what you have! Cars and fancy clothes are liabilities and will not put money back in your pocket - they will drain your pocket. These materialistic things won't make you happy anyway. What will make you happy is being completely free from debt. Trust me on this one. 

Here are two strategies I've used to get of debt and build my net worth:

*Use Assets to Pay Off Liabilities: If you want to invest, think about the idea of buying dividend paying blue-chip stocks. Then use the dividends they pay out quarterly and use that money to pay off your student loans directly. Your asset (stocks) are paying off your liabilities (student and credit card debt). This way, your original principle, or money you put down on the stocks originally, is still there! I did this and had good returns from both dividends and stock appreciation.

* Purchase Real Estate - this works if you've been working full-time for at least two years and if you have a good credit score to get approved for a loan. If you're a first time homebuyer, you will most likely be eligible for a FHA down payment of just 3 percent. So you won't have to put much cash down to buy your home. I suggest this option because right now I really do think real estate is a good buy - interest rates on 30-year mortgages are at all time lows (less than 4 percent!) and I also think real estate prices have bottomed out. Real estate is a great investment, in my opinion.If you buy now, you could do very well if real estate market re-covers. You can always consider the option of renting out your home if worse comes to worse.

Recent college graduates certainly have it rough, but just remember that anything is possible and if you work hard and be smart, you can get out of debt very fast. I wish you the best of luck in your journey of paying off your students loans and being debt free!