Okay, so you can probably tell by now that I have some problems with the 50/30/20 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. The savings category in the 50/30/20 rule covers a lot: retirement investments, emergency fund savings, and any extra debt payments above those minimum payments. 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. This includes unlimited data plans, eating out, and new clothes-what some people call the fun stuff. 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 a need. But when we start dividing things into 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. You need to pay for those things, so they fall into this section. But needs in your budget are all the things that would majorly affect your life if you dropped them: food, utilities, shelter, transportation, health insurance, day care, and the minimum payments on all your debts. And some of us think we need more than others. 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. This budgeting plan first showed up in 2005 in a book called All Your Worth. We’re going to 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. ![]() You might feel confused or intimidated when it comes to budgeting.
0 Comments
Leave a Reply. |