Saturday, August 28, 2021

What is the 50/30/20 rule?  The rule is a template for a standard financial plan. It is meant to help you effectively manage your money. According to this rule, you should spend up to 50% of your take-home income on needs that you can't live without.

 

These include rent, utilities, car payments, groceries, insurance, and health care. The remaining half should be split up between two categories, 30% to wants and 20% to savings and debt payments. Your wants may include dining out, vacations, streaming services, and shopping.

 

The remaining 20% can be put towards a savings account, or paying back any outstanding debts. This rule will help you stay on track with your finances while ensuring you don't compromise on your lifestyle or your long-term goals.

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