should not exceed half of your take home salary. Therefore, the costs associated with your housing arrangement pooled together with your choice of transport, groceries, etc. Your budget must be structured so that all those expenses fall within 50% of your income. Ha lf of your take home salary should be used to cover your needs. If that got you super excited and ready to spend, you really need to continue reading and probably should set this blog post as your default screen. Time to burn that sucker up! ( If that made you smile, continue reading. Your standard pension contributions have been met. The government is happy as your taxes have been paid.
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Let’s break down each category into additional details. The 50-30-20 guide is a foolproof plan and excellent starter concept to help you manage your money. 50% of this pie would be used for survival, 30% for recreational purposes and 20% saved for the future.īasically… 50% must be allocated to NEEDS, 30% to WANTS and 20% to SAVINGS ! Whether this pie is the pie you wanted, the size you wanted, if it’s topped with whipped cream or not, it’s the pie you have.
This is your take home salary after your taxes, pensions and direct deductions have been made. Basically, regardless of your volume of income (whether you got those big bucks or just trying to get by), this is a good rule to follow. As we continue to explore this subject, we need to ask ourselves “Where to begin?” The 50-30-20 Budget Guide is a Rule of Thumb aid to help you divide your income and allocate what needs to go where. Whatever your financial goals are, you must have a plan. Just as granny hid a small stash for a rainy day under her mattress back in the day, so should you. Whether you like it or not, you need money now and you’re gonna need it tomorrow. The bottom line is that you should be working towards you r financial goals, security and you should be saving money. Similarly, you could be raking in millions but be absolutely miserable because your billionaire buddy has a nicer private jet than you do. If you are comfortable with earning $10 a month and living in a 1 bed/bath cardboard box, under the freeway, then who am I to judge. It varies with everyone and depend s on someone’s specific income along with the desired standard of living. The truth is saving money and financial security is a case sensitive topic.
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If you want to learn more about how to budget money using the 50 30 20 method, stick around. And one of the best budgeting methods is the 50 30 20 budget rule. Even though the concept of saving money would vary on the priority spectrum from person to person, it is a part of a responsible adult life.īelieve it or not, one of the first steps to saving money is budgeting. How to get your finances under control with the 50 30 20 Budget Rule (using a Spreadsheet, Printables and Examples)Įveryone wants to save money. 50 30 20 Budget with Examples (Free Budget Spreadsheet & Printables).Final Thoughts on the 50-30-20 Budget Rule.
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