Money-saving Mondays: Why new graduates should learn the 50-30-20 rule

CHICAGO (WLS) -- As college seniors prepare to graduate and head out on their own, they may find it difficult to make ends meet financially.

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The average rent in Chicago is over $1,800, more that 20% higher than the national average.

CEO of Wealth Management Group Craig Bolanos joined ABC7 Chicago to share essential money tips for new grads.

To help graduates balance social life and essential spending needs Bolanos recommends the 50-30-20 strategy.

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Where 50% of their paycheck goes to essentials, including rent, groceries, transportation, etc.

Twenty percent goes toward a savings account or into investing.

The last 30% of their paycheck goes toward nonessential expenses.

Student loan payments fall into the 50% of their budget. Bolanos recommends making additional principal payments toward the debt from the 20% budget.

Bolanos added that the early graduates start thinking about retirement the better. He suggests immediately enrolling into their job's retirement saving account, or looking into a Roth IRA.

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