How to save money: Tips for Chicago-area college students, teens on loans, personal finance, and getting a good credit score

CHICAGO (WLS) — Understanding money management is relevant for all Americans, and starting early could save teens a lot of time and money.

Roy Paul of Cents Ability, Inc. has joined ABC7 to provide tips on how to talk to teens about saving and ways to maximize your money.

Paul explains the “50/30/20 rule,” where 50% of your net monthly income goes to your needs like rent, car payments, essential groceries and utilities, 30% of your income goes to your needs like memberships, restaurants, shopping and more while 20% is for saving.

“Saving early can create long-term financial success,” Paul said. “When you save early, you can accumulate more wealth even if you save more later in life.”

Paul also recommended teaching teens how to budget when students start their first job. He also emphasized the importance of understanding good and bad credit.

He said an important tip is to educate yourself about the financial impact of student loans.

“Know how much you’re going to have to pay back before you take out student loans,” Paul said. “Many students are shocked once they graduate and receive their first reimbursement bill.”