*

New grads should follow a 50/30/20 budget

*

Student loans are second-highest household debt after

mortgages

*

Budgeting crucial for unemployed grads to manage debts

By Lauren Young

NEW YORK, May 15 -

This was originally published in the On The Money

newsletter, where we share U.S. personal finance tips and

insights every other week. Sign up

here

to receive it for free.

My social media feeds are filled with Class of 2025 college

graduation photos, so I figured this would be a good time to

offer up a few key money tips for new grads who are just

entering the workforce.

SET A BUDGET

Shikha Narula, who is head of consumer and small business

product strategy, transformation and rewards at Bank of America ( BAC )

(yes, that is her actual title!), suggests new grads follow a

50/30/20 budget.

Here is how it works: 50% of your earnings should be used to

cover "needs" - basic essentials like rent, student and credit

card debt along with car payments.

Put 30% of your paycheck into the "wants" bucket to cover things

you would like but don't necessarily need, such as travel and

dining out.

And the remaining 20% should be set aside for savings and

investments - this money can be used for buying a home or

retirement.

In addition, start directing money into a separate emergency

fund, which can tide you over during a layoff or another major

financial disruption. It may take a while to build up an

emergency fund to cover one year's worth of expenses, ideally.

Your employer might even help.

"It is okay to build toward that. It won't happen right away,"

Narula says.

The hardest part is to stay disciplined, particularly when it

comes to socking away money.

"It's easy to ignore the savings component," Narula says. Be

sure to take advantage of employer-sponsored savings plans, such

as a 401(k) retirement plan and maximize any savings matches.

KNOW WHAT YOU OWE

Student loans make up the second-highest form of household debt

after mortgages, totaling more than $1.6 trillion. That works

out to about $38,000 per borrower.

Indeed, paying off those loans can be a huge burden, which

is why new grads should be sure to fully understand their loan

requirements, interest rates and monthly payment dates.

If possible, automate your student loan payments, so you can set

it and forget it.

This information is most helpful for anyone who has an income.

But, incidentally, the top post-graduation fear among students

is not finding a job (44%), followed by student loan debt (33%)

and credit card debt (18%), according to a new study from

WalletHub.

STILL UNEMPLOYED?

If you don't have a job yet, a budget is even more important!

When you don't have money coming in and still have bills to pay,

you need to obtain near-term funds at the lowest rate possible,

Narula says.

"Prioritize student loans and credit card debt, and stay within

your means," she adds.

What other money advice do you have to share for recent college

graduates? Write to me at .

READ, WATCH AND LISTEN

Retailers rush to save US summer shopping season

I polluted the minds of 8,679 college graduates (WSJ)

Luxury sector faces more gloom as Bain cuts sales forecast

US SEC chair says agency plans to create new rules for

crypto tokens

Amazon signs up FedEx ( FDX ) for residential deliveries

These investors cashed in by holding firm when markets

slumped (WSJ)

Trump vs. Ivy League nest eggs, university research and

student access

Your summer travel guide for 2025 (Washington Post)

Walmart ( WMT ) warns of higher prices due to tariffs, holds off on

second-quarter guidance

My friends and I are rethinking our spending because of

economic anxiety (WSJ)

Summer could be about to get a lot more expensive, thanks to

tariffs (Washington Post)

Market rally shows 'worst outcomes' off table

Remarrying in retirement? It can make money management

tricky (NYT)

FIVE THINGS I LEARNED READING REUTERS THIS WEEK

1. Nearly 70% of the flights at Newark Liberty

International Airport are operated by United Airlines. Key

rivals like Delta Air Lines ( DAL ) and American Airlines ( AAL ) only have

about a 5% and 4% share of traffic at the airport, respectively.

2. In April, U.S. egg prices surged 49.3% from a

year ago

. Egg prices were cited as one of the factors

contributing to voter discontent during the last presidential

election.

3. U.S. businesses largely rely on ocean shipping

but that

can take between 30 and 60 days for goods to reach the United

States from China, depending on the destination and ship size,

although orders for the summer can start in late winter or early

spring to allow for the manufacturing of new designs

4. Uber's new "Route Share" ride option will cost

half as

much as the company's UberX ride-hail service, by providing

pickups every 20 minutes along busy commute corridors.

5. The top 10% of American earners increased their

spending

58% in the four years through September 2024. Consumption growth

from everyone else barely outpaced 21% inflation recorded over

the period.

A$K LAUREN

Are you trying to build an emergency fund? Do you need to find a

financial adviser? Send your personal finance questions to , and

I'll tap my extensive source network and braintrust for expert

advice.