September 25, 2022
Financial Budget Rules

Financial Budget Rules

The beauty of the 50/30/20 budget rule is in its simplicity. All the income is broken up into three spending buckets: 50% for needs, 30% for wants, and 20% for savings and debt.

How to use it

  • Step 1 : Figure out your take-home pay.
  • Step 2 : Calculate your percentages.
  • Step 3 : Adjust your spending and saving.

50% Needs

  • Health, life, disability, and other insurance
  • Car insurance, maintenance, and gas
  • Medical bills and prescriptions
  • Utilities, phone, and internet
  • Public transportation
  • Daycare and tuition
  • Mortgage/rent
  • Groceries
  • Car payment
  • Student loans

30% Wants

  • Gifts
  • Travel
  • Cable TV
  • Eating out
  • Charitable donations
  • Makeup and hair products
  • Home decor and furniture
  • Clothes, shoes, and accessories
  • Movie, sports, and concert tickets
  • Streaming services and other subscriptions
  • Credit card bills

20% Savings

  • College savings
  • Retirement savings
  • Personal loan payments
  • Short-term savings goals

Most of your savings must in done in form of investments to meet future inflation.

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