Today's newest generation of adults is living on the edge of a financial abyss, saddled with debt, behind in payments, lacking health insurance and competing for starter jobs that offer little in the way of security. Those are the findings of several recent studies and reports that have focused on Generation Y.

"For the first time in the history of our nation (the US) there's the possibility that this generation faces less opportunity than the prior generation," says Eileen Quigley, of Qvisory.com, a new AARP-like advocacy organisation for young adults.

Its survey revealed that more than half of young adults are paying only the minimum monthly amount on credit cards; nearly one in five have had their phone, cable, or utilities cut off, and more than half of all young people have gone without health insurance at some point in the last five years.

But Gen Y also seems like a savvy and entrepreneurial generation that can capitalise on what it already knows to get ahead. If any cohort can handle the instability of the new economy, this one can.

Here's how to get started.

l Establish a baseline. Collect all of the information related to your financial life: salary information, bank account balances, bills and debts. Put it together so you have a clear picture of what you own and what you owe. That's called a net worth statement. Don't despair if this is a negative number, just figure out what the number is. Over time you will be able to turn it into a positive number.

l Budget. Yes, figuring out a budget is uniquely boring and stressful at the same time. But if you write down all of the money that is coming in and all of the money you know you'll have to spend over the next month or two, that will give you an idea of whether you're making it or not. If you are spending more than you're earning, your only real choices are to cut spending or earn more. You can use online tools like wesabe.com, mint.com, geezeo.com or quicken.com to collect and organise your financial information.

• Prioritise. This is the hardest part for people starting out. Do you pay off the MasterCard, put money in the 401(k) or buy a job interview suit? We all have to determine our own priorities but here's a rough order of how to deploy your cash: (1) pay off high interest debt; (2) spend money on items and services you need to further your career, including work clothes, computer service and the like; (3) put money in tax-deferred retirement accounts, especially ones that your company will match; (4) put money in a rainy day/downpayment fund to buy stuff that you want.

• Get health insurance. Buy your own health insurance if you're getting dumped from your parents' plan and you don't have that benefit at work. If you're young and healthy it probably won't be too expensive; check at ehealthinsurance.com for policies you can buy. Owning your own health insurance enables you to switch jobs as you need early in your career without worrying about your employer cancelling you, and without getting locked into a lousy job just for the health care. It also insulates you from the economic ruin that even a bad snowboarding incident can cause in the life of a young person.

• Build a career. The job market remains discouraging right now, but the long-term trend is growth, and the economy will have to replace retiring baby boomers, too. There will be solid demand for everything from teachers to film directors. Companies will be less paternalistic, so workers will have to take more responsibility for designing their own careers, negotiating the best salaries they can get, and covering more of their own benefits. Gen Y is generally accustomed to fending for itself and has many entrepreneurial qualities.

So put them to use: Find mentors that can help you chart your course. Use those social networking skills to connect with many people in your chosen field and always be thinking about your next job while you're in your current job. Keep up technical skills and market yourself aggressively.

• Take baby steps to invest. The earlier you learn how to invest and start salting away cash, the richer you'll be for the remainder of your life. But the world of investments is daunting, and the financial services companies sometimes make it seem even more confusing than it needs to be. Start small and slow.

You can open an account at fidelity.com or vanguard.com and buy one low-cost mutual fund that invests in a broad array of stocks. Authorise the fund company to deduct a certain amount out of your checking account every month. You'll be an investor.

Start to learn more at websites like The Motley Fool (www.fool.com) and the American Association of Individual Investors (http://www.aaii.com/basics/).

If you are young, you can afford to spend years learning about investing and still have time to grow some real money.

Linda Stern is a freelance writer. Any opinions in the column are solely those of Ms. Stern. You can e-mail her at lindastern@aol.com.