![]() Whether you have a mountain of student loan debt or you’re debt-free and investing in retirement, you’re stuck with 50/30/20. Those three budget percentages stay the same no matter where you are in life. So I do appreciate that the 50/30/20 rule values building that up. Our State of Personal Finance study shows 34% of Americans have no savings at all. When you make your first budget, using an outline or guidelines can help you feel less overwhelmed. On the upside, if you’re using the this rule to budget, well, you’re budgeting! You’re making a plan for your money, and that is so important.Īlso, the 50/30/20 rule gives you a starting point to help you decide where your money goes. Let’s talk about why.įirst, what’s helpful about the 50/30/20 rule? Okay, so you can probably tell by now that I have some problems with the this rule. That’s just 20% of your income to get you feeling safe and secure with money for today, tomorrow and down the line in retirement. Any extra debt payments above those minimum payments.The savings category in the 50/30/20 rule covers some super important parts of your budget: so 30% of your income can go to the things you want, even if you’re drowning in debt or have an empty savings account? Something’s off here. New clothes (not because your kid outgrew his jacket but because you fell in love with a cute new jacket).The 50/30/20 rule says to spend 30% of your take-home pay on the stuff that improves your standard of living. We can do without wants (even if it’s uncomfortable). Wants still affect our lives, but not like needs. But when we start dividing things into monthly budget categories based on wants versus needs, the lines can get real fuzzy. You guys, read this carefully: Wants aren’t needs.Īnd we all know this-in theory. If those things are in your budget, you need to pay for them-so they fall into this section. Utilities (like electricity, water, natural gas).Needs in your budget are all the things that would majorly affect your life if you dropped them. This budgeting method divides your spending and saving into three categories: needs (50%), wants (30%) and savings (20%). It was originally named the 50/20/30 rule-but you’ll see it called the 50/30/20 rule more often. ![]() What is the 50/30/20 rule? Well, this budgeting plan first showed up in 2005 in a book called All Your Worth. We’ll talk about what it means and how it works-and see if it’s the best way to budget for you. Let’s dive into one popular method out there: the 50/30/20 rule. And on top of it all, there are so many different ways to budget. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |