If you are entering your last year as a student, you will probably want to begin applying to positions as early as four months before you graduate. (In special cases even earlier: for example if you just finished your second year of law school, you would ordinarily begin looking for articling positions immediately, even though you would not actually start working until after you graduated a year later.)
Leaving it to the end of your degree will mean that you will most likely spend several months out of school without work and without pay. Not only is a bumpy transition not in your interests financially, it looks bad in your employment history which employers pay keen attention to.
Some employers begin recruiting for April graduates as early as November or December of the previous year. They assume that the most qualified candidates will also likely be the earliest ones who begin searching for work. Students who apply this early are most likely the ones with the highest motivation and work ethic. It's a very good idea to jump on that bandwagon!
If you have several years to graduate, it is extremely helpful to get part-time or summer work, preferably in the field which you want to apply. Having part-time or volunteer experience in the area you want to be in shows an employer you enjoy learning more about a specific field.
Having background experience indicates diligence and determination about your career as opposed to being a sleepwalker. Employers want to know what's in it for them if they hire you. If you can show intimate knowledge about their business or have undergone personal development to make yourself a more qualified candidate, you will be heads and shoulders above the competition.
Experience is the principle distinguishing factor among graduates. The amount of money earned in a training position should always be a secondary consideration to gaining experience. For example, if you are a science undergraduate, you could try finding work as a lab tech or research assistant with one of the professors in your faculty. Or if you are an arts undergraduate, you might try writing for the student newspaper. Its not easy, but the harder it is to find that experience, the more it counts when you begin looking for full-time employment.
If you are already working, applying for other work is smart Studies show that it is easier to find work while you are employed. It's also better to have another job lined up to begin as soon as you've finished your current job because recruiters always look for gaps in your employment history.
If you land a better job, then out of common courtesy and for the sake of getting references it's important to give adequate notice to your current employer. Anyone who is worth working for will give you the room to end things amicably with your current employer. If your current employer even hints that one-month notice is unfair in some way, you might want to forget about listing them as a reference. Chances are high that if your employer feels slighted it will come out in his appraisal of you to future recruiters.