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 (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 onthemoney@thomsonreuters.com.

READ, WATCH AND LISTEN

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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 and American Airlines 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 onthemoney@thomsonreuters.com, and I'll tap my extensive source network and braintrust for expert advice.

(By Lauren Young; Editing by Mark Porter)

((onthemoney@thomsonreuters.com ))