(MONEY Magazine) – PUNDITS TELL US TO PITY THE GENEration X-ers, that group of 29 million young adults born from 1965 through 1972. Not only must they live in the demographic shadow of the 76 million baby boomers born before them, but they've had the economic bad luck to hit the job market as thousands of U.S. corporations are paring payrolls, probably for keeps. From 1989 to 1993, for example, anticipated hiring of first-year college grads by medium-size and large U.S. companies was off a full 35%. Even now, despite the improving economy, Michigan State University's Collegiate Employment Research Institute forecasts only a 1% lift for the class of 1994. "For this generation as a whole," sums up Bill Strauss, co-author of 13th Gen: Abort, Retry, Ignore, Fail? (Vintage, $10), "the numbers are bad." And so are the pop stereotypes, as anyone knows who has seen the spring movie Reality Bites. The prevailing view of Generation X, of course, is that even the luckiest of them -- those with college degrees -- are slackers who must spend years jammed into cheap apartments, punctuating their unemployment with degrading stints at McDonald's and The Gap. Savings? You've got to be kidding. But in truth, says Strauss, "the hallmark of Generation X is a tremendous range of economic fortunes." Many of these young people, far from living the reel life of Reality Bites, are prospering. And, says Strauss, "those who are doing well are doing very well." In the spring of 1993, MONEY decided to track several Generation X-ers to see the story behind the statistics. After a nationwide search, we ended up at Northwestern University in Evanston, Ill., where four seniors, all close friends, agreed to let us report their progress during the first year after graduation in exchange for financial advice. The friends -- Mollie Fleming, Todd Johnson and Leslie Kleinberg, now all 22, and Paul Fitzgerald, 23 -- are pursuing careers in four distinct fields in four cities across the country. Yet despite varying goals, their postgrad lives show that a combination of smarts, persistence, talent and, yes, luck can explode the slacker stereotype. Three of the four were among the fortunate 50% of dependent college students who didn't need financial aid: Their parents paid most of their living expenses as well as the entire $56,166 tuition tab at Northwestern, a selective private school. Johnson and Kleinberg landed challenging full-time positions at 3M and at a nonprofit educational consulting firm, respectively, even before they graduated. Fleming completed her first year at UCLA Law School on May 2. Even aspiring actor Fitzgerald, in a profession rife with failure, has snagged roles with a prestigious theater. Still, like most young adults, the quartet have managed only spotty success with personal finances. Their achievements and missteps hold lessons for current and soon-to-be graduates -- and for parents as well. Here's how our fab four fared:

AN EASYGOING SIX-FOOTER FROM LYNCHburg, Va., Paul Fitzgerald got interested in theater as a fifth-grader when he landed a role in a community production of an O. Henry play. At Northwestern, however, this second of three children of an orthopedic surgeon and a journalist briefly switched his major from performance arts to history. "I was wigging out about my future," he admits, "but then I adjusted to kissing off a normal path to security." His parents "have been very supportive," he told MONEY in May 1993, "but it's taken a long time for them to really embrace my career choice." Fitzgerald's first postgraduate months in the Chicago area were rough. "I was subletting a teeny, $270-a-month room in an apartment with three other people," he recalls. "It was hotter than hell, and we had no air conditioning." He spent the summer " running downtown to auditions in a jacket and tie, sweating." Nor was Fitzgerald thrilled with the "dive" where he was forced to work as a waiter up to five nights a week for $50 a night, including tips. "There are 35-year-old actresses working there,"he said glumly last summer. "It's depressing." He got a break last fall with a two-month job as a $190-a-week understudy in the play The Notebooks of Leonardo da Vinci at the famous Goodman Theatre -- and wound up with a week in the bright lights when a headliner took sick in December. Immediately after, he won a speaking role as a guard in the Shakespearean Richard II, also at the Goodman and for the same pay. The show ran through Feb. 19. "I've been lucky," he said last December. It's hardly all glamour. Fitzgerald quickly takes jobs his agent digs up, from a Ponderosa steakhouse commercial ($450 minus the agent's 10%) to a training film for the accounting firm Arthur Andersen ($400). When he's not rehearsing or performing, he still waits tables -- now at the upscale Italian restaurant Scoozi! (about $85 a night, including tips). As much as he loves the stage, Fitzgerald observes that "there is no such thing as making a living from theater in this country." The average Actors' Equity union member (39,000 nationwide) earns only $11,112 a year from stage roles. "That," he says, "makes me think about films." But he hesitates to move cold to New York City or Los Angeles. "Northwestern has given me lots of connections that make it easier to work here," he says. He also ponders grad school in theater, though he hasn't looked into costs. Truth is, it's tough enough for Fitzgerald to cover even modest expenses. With before-tax earnings at an ascetic $1,200 or so a month and his solo studio apartment near Wrigley Field at $450, he says, "I don't spend a dime more than I have to." Luckily, his restaurant hours -- 4 p.m. to 11 p.m. or so -- squelch the temptation to go out much. He eschews cable TV, bypasses renters insurance (as do the other three grads) and spends virtually no money on clothes. At his parents' urging, though, he grudgingly shells out $81 a month for a Blue Cross/Blue Shield of Illinois health insurance policy that carries a $1,000 deductible. (All four grads have health coverage.) The $4,000 Fitzgerald had in his 2.4% bank savings account at graduation is down to $2,000 today. It would be gone entirely if he weren't one of the 18% of 21- to 25-year-olds whose parents supplement their offsprings' incomes. That help has totaled about $3,000 in cash since graduation, not including a $2,000 Individual Retirement Account in Fidelity Equity Income (12-month return to April 1: 5.6%) that his parents opened for him shortly after Christmas. His folks have also covered three round-trip plane tickets to Lynchburg (about $600 total) and insurance premiums on his 1990 Toyota Corolla (he doesn't know the cost). "I want to survive without too much help," sums up Fitzgerald, whose next goal is to join a traveling repertory theater. "But my parents are the only reason I've been able to make it."

IF PAUL FITZGERALD ACCEPTS THE RISKS OF the theater, friend and first-year UCLA law student Mollie Fleming is, as she puts it, "attracted to stability." That motivation helped the youngest of a well-to-do seven-member Bloomington, Ill. clan decide on law school back in her sophomore year at Northwestern. ) "The job market is very competitive," she reflected in May 1993, "and being a student feels secure. Not having job prospects would scare me to death." But law is hardly the ticket to automatic prosperity it was a generation ago. According to the National Association for Law Placement in Washington, D.C., the median starting salary for 1992 law school graduates was just $36,000, or $4,000 less than in 1991. And a MONEY study published earlier this year ("The Best Jobs in America," March) describes lawyers' short-term job outlook as only fair. Fleming is undaunted: "Pay is so dependent on what law school you went to, and UCLA is a good one," she says. Indeed, the median starting salary of 1993 UCLA law school graduates was a robust $67,000. She plans to enter health law (which can be a potentially booming field if health-care reforms materialize) or family law, "where I can be doing good things for people." Armed with a 3.8 grade point average in economics and psychology and a 97th- percentile score on the Law School Admissions Test, Fleming had her pick of schools. But she followed her heart as well as her head. She turned down a full-ride scholarship estimated at $46,250 from Washington University in St. Louis because she wanted to be near her boyfriend, another Northwestern grad, Rob Benedict, trying his luck as an actor in Los Angeles. The $1,500 grant she won at UCLA fell short of its 1993-94 tuition for out-of-staters: $12,202, or 27% higher than the nation's median nonresident public school tab. (Her tuition will drop to about $4,500 this fall after she qualifies as a California resident.) So Fleming took on a $6,350 federal Stafford student loan (variable interest rate: 6.94%; payable after she graduates) -- her only debt so far. And in September she began juggling expenses while trying to stretch the then $20,500 in liquid assets that remained after paying her tuition. "I have a lot to learn about money," says the reserved Fleming, who keeps most of hers -- $10,500 -- in a bank savings account at 2.1%. "I own stocks and things I don't completely understand." That includes $2,000 that her doctor father and homemaker mother invested for her in the medium-term Kemper U.S. Government Securities Fund (12-month return to April 1: 1.5%), down from $4,000 at graduation, as well as 105 shares of Archer Daniel Midlands stock (recent value: $2,500, down from $2,835 last February). She owns a 2.4% interest in an illiquid 780-acre family farm outside Bloomington, valued at % $41,000, from which she receives $900 of annual income. And she gets $161 a month from engineer brother Mark, 29, as repayment for the $15,000 of her assets (an inheritance and income from the farm) that she lent him in 1988 at 10% interest to help him buy a house in Pasadena. Every bit of income lightens the rental burden of her furnished studio in a five-story stucco building near campus: a towering $710 a month, plus $39 for parking the 1988 Toyota Corolla she drives but her married brother Mark owns (insurance costs: $1,424 a year, paid by Fleming). "I panic about my rent all the time," she says softly. "I could cut it in half if I had a roommate, but it's easier to study without one. And getting poor grades will affect what I earn down the road." Thanks to an average of five hours a day studying on top of her 8:30-a.m.-to-3-p.m. class schedule, Fleming chalked up a respectable B average in her first semester. Still, she hopes to do better. "Law school is tougher than I thought," she said last March, with a small smile. She's finding it equally challenging to land a summer job, despite blanketing California law firms with 300 resumes last January. If nothing turns up, this future lawyer admits she may share Fitzgerald's occupation: waiting tables as she dreams of bigger things.

WHILE FLEMING ADJUSTS TO LAWYERING IN the downsized '90s, Todd Johnson's budding career looks like a 1950s time warp. Seven months before graduation, the good-natured former Alpha Delta Phi fraternity president and industrial engineering major from San Diego landed a plum trainee job at corporate behemoth 3M in St. Paul. His $38,400 salary is 15% higher than the average for new grads with his major, according to the Collegiate Employment Research Institute. Johnson's success comes from an early smart start. Northwestern's associate dean of engineering helped him discover a summer internship at 3M while he was still a freshman -- and he worked there three summers in a row. "Because training programs have been cut back, internships are more important than ever," says Victor Lindquist, Northwestern's dean of placement. According to a survey of 264 U.S. companies recently conducted by Lindquist, 26% of the nation's 1993 college graduates hired by medium-size or large companies had worked as interns for those firms, up from 17% in 1992. Johnson's laser focus has a downside, though. "I kind of envy people who are still finding their way," he confessed in May 1993. "Sometimes I feel like I'm * growing up too quickly." The two-year program, which frequently shuttles trainees to 3M offices around the country, has certainly plunged Johnson into the rigors of corporate life. His initial assignment: to help reduce polluting emissions in 3M's downtown St. Paul tape plant. After four money-stressed college years in which he occasionally had to hit up relatives for loans (all since repaid), this second son of a naval surgeon and a director of a Chicago arts program found his adult-size paychecks a powerful temptation. "At first I thought I'd just live in a hut," Johnson reflected in February. Right after graduation, his goal was to save $20,000 to $30,000 over the next two years to pay the roughly $21,000 tuition for Northwestern's Masters of Management in Manufacturing program. " Then I thought, I'm making money -- I might as well enjoy it." So last September, Johnson traded up from the run-down $305-a-month Evanston apartment that he had been sharing with two of his friends to a solo $620-a- month one-bedroom with a balcony in a luxury St. Paul high-rise. That same month, he spent $2,000 on a stereo with CD player and speakers, color TV, VCR, microwave, phone, blender and waffle iron. Thousands of more dollars went for business suits and plane tickets to visit friends and family, as well as payments on his 1992 Saturn ($255 a month). Result: From being debt-free last June thanks to $28,000 in college grants, Johnson joined the 37% of 21- to 25-year-olds -- according to a recent Equitable Life Assurance survey -- who pay revolving interest month to month on their credit cards. At this point he has carved the $8,000 that he racked up on plastic and on a bank line of credit to $4,000. And his assignment last March to Knoxville, Iowa (pop. 8,200) is strengthening his resolve -- if not his social life. After giving up the St. Paul apartment, Johnson now pays only $350 a month for a two-bedroom duplex apartment in nearby Pella. Plus, 3M has added a nontaxable $45 per diem living allowance for every day he is at work. Like the majority of his peers, Johnson hasn't gotten around to participating in his employer's 401(k) savings plan. The plan allows up to 16% contributions of before-tax earnings (up to $9,240 this year) that grow tax deferred; 3M matches at least 35" on every dollar he contributes up to 6% of pay. Quickly wiser if not much older, Johnson plans to open a savings account in a few months as soon as he pays off his debts. But he remains ambivalent. "What bums me out is that the more money I save, the less fun I'll have," he said in spring 1994. Graduate school still appeals to him, especially now that he's discovered another 3M benefit: Its tuition-reimbursement program covers the cost of night classes.

LESLIE KLEINBERG, A CONFIdent woman with a contagious smile, is delighted by Johnson's success. But it also gives her pause. "When I look at TJ (Johnson), I feel envious," admits the Rochester, Minn. native, who shared an off-campus apartment with Mollie Fleming during their senior year and now works for Independent Educational Services (IES), a nonprofit educational consulting and recruiting firm in Princeton, N.J. " I did the same amount of work as my peers in college," says Kleinberg, "and some of them are making so much more money. It' s frustrating." The demands of her $20,000-a-year job prove her point. Since October, Kleinberg has spent about half her time on the road, recruiting graduating seniors as teachers for independent primary and secondary schools. The field of private-school admissions intrigued the ambitious music major after she " burned out" on her former passion: playing the viola. Says Kleinberg: "I didn't want to spend my life auditioning, like Paul does." She was savvy enough to launch her own job hunt after conferring with friends. "Northwestern's placement programs were useless for me," she explains. "Most companies coming to interview are in engineering or finance." Instead, during the fall of her senior year, she sent a targeted mailing of 10 job queries to private schools around the country. As a result, she had the luxury last spring of choosing among three offers in admissions and development at roughly the same $20,000 salary. One of two children of a neonatologist father and a real estate agent mother, Kleinberg has applied similar discipline to her financial life. Debt- free, she holds down costs by sharing a two-bedroom apartment near Princeton in Plainsboro, N.J. with a 22-year-old research assistant whom she met through a friend (monthly rent: $425, up slightly from Evanston's $390). Since October, she has been able to salt away $100 a month in a bank savings account that pays 2.3% -- and is the only one of the four friends to do so. Some expenses shocked Kleinberg. She was horrified, for example, to wind up owing $400 after a visit to the emergency room for an upset stomach, despite health coverage. "I couldn't believe it. There's this thing called a deductible," she says (a typical $100; she pays 20% of remaining bills). And she's infuriated that she runs through hose at the rate of $5 to $10 a week. Kleinberg also found that even meticulous plans can go awry. For example, in May 1993, she had planned to stick with her IES job for two to three years. Not anymore, though. "I hate the East Coast," she said last March. She is also thinking about switching from education administration to fund raising or arts foundation work, then going for an M.B.A. "I need to go to grad school to get a good job," says Kleinberg. " Undergraduate degrees are a dime a dozen." She is counting on her parents to pay tuition (about $20,000 a year at a business school like Stanford). Kleinberg is learning that romantic connections can be as impermanent as first jobs. In April she broke up with her boyfriend of three years, a 23- year-old technology researcher living nearby. But she is looking ahead. She has flown to a city she loves, San Francisco (cost: $500), to job-hunt and, she says, "I feel organized and purposeful." All the same, however, some habits die hard. Her parents cover the insurance on Kleinberg's black 1993 Nissan Altima, a $14,900 graduation gift. Her father calculated her 1993 taxes (she's due a $250 refund) -- "I wouldn't know what to do. I'm totally intimidated," she says. And, though she says her parents have put maybe $30,000 in her name, Kleinberg has no idea how it's invested. "That's not really my money," she says hastily. "My father has complete control of it."

The advice In March, MONEY flew Fleming, Johnson and Kleinberg to Chicago, where they joined Fitzgerald to assess their progress with fee-only financial planner Carol Pankros of Palatine, Ill. and with investment adviser Mike Ryan of Wilmette, Ill. The pros' tips: Become educated investors. Like most recent grads, says Pankros, the four friends are naive about saving and investing. She suggests that they learn some personal-finance basics from publications and books, such as the Wall Street Journal Guide to Understanding Personal Finance (Lightbulb Press, $13.95). Kleinberg, especially, should develop some curiosity. "Leslie is an adult, and the money her parents put in her name is legally hers," Ryan points out. "At least, she needs to ask them how much there is and how it's invested -- and speak up if she disagrees." Rein in spending. Specifically, Johnson must curb his "fun" outlays -- and ; Fleming should consider a roommate. "If paying big rent checks makes Mollie nervous now," says Ryan, "think how she'll feel when her bank account gets smaller." Build an emergency fund of three to six months' living expenses -- especially critical for actor Fitzgerald. The first $2,000 should go into a low-risk money-market fund, which typically pays a quarter of a percentage point more than a bank savings account. Pankros likes low-minimum, no-load Twentieth Century Money Market (minimum initial investment: $1,000; recent yield: 2.9%; 800-345-2021). She'd put the rest in a conservative, short-term bond fund such as Neuberger & Berman Ultra Short Bond ($2,000 minimum; 12- month return to April 1: 2.2%; 800-877-9700). That's also the place for the $4,500 that Fleming currently has in the medium-term bond fund and in ADM stock, which is far too volatile for short-term needs. Prioritize goals and save for them. "They've got to treat their personal finances with the same discipline as their careers," says Ryan. One important goal for the working trio should be saving at least 10% of their gross income every month. Use tax-advantaged savings plans. "It's never too early to save for retirement," advises Pankros, "especially since employer-benefit packages will probably continue to shrink."Johnson should begin contributing the maximum 16% of his salary to 3M's 401(k) plan. Because stocks' historical 10%-a-year return beats all other investments, the advisers recommend an all-equity portfolio: 40% in the plan's stock index fund, 40% in the growth stock fund and 20% in the international fund. And if Johnson puts $500 a month toward debt, he will be able to pay it off within a year. Kleinberg might inquire about retirement savings packages as she interviews for new jobs. And Fitzgerald can add money to his deductible IRA once his income improves. Consider renters insurance as earnings increase. Renters policies run $100 to $250 a year for $10,000 of personal property coverage and $100,000 of liability coverage.

A few weeks after the advice session, Johnson vowed to start contributing the maximum to his 401(k) plan: "I shouldn't have put it off." Fleming was looking into the recommended funds. And, reported Kleinberg: "My parents agreed I should know more about the money in my name." She was stunned to learn it totals a whopping $90,000 or so. As for Fitzgerald, he doubts he can build even a $5,000 emergency cushion. " I'm still living hand to mouth," he said resignedly.