Use the 50/20/30 Rule to Set Your Budget for Any Occasion
The best way to keep your budget balanced is to define your financial boundaries before you start spending. The 50/20/30 Rule will help you allocate all your expenses correctly.
As the personal finance site Money Ning explains, the 50/20/30 Rule is a basic, broad guide to help you budget for a variety of financial goals. This is how it fails:
- Fixed Costs (50%): Anything you have to pay for on a monthly basis should be half your salary, where possible. If you make $ 3,000 a month, don’t live in a place where the rent is $ 2,000. Keep your rent / mortgage, utilities, and checking bills below this 50% line.
- Financial Goals (20%): This category should be dedicated to whatever goal you have. This can include building up savings, paying off debt, creating an emergency fund, and so on.
- Flexible spending (30%): This category can include anything that changes from month to month. This can mean things like grocery shopping, but it can also include your entertainment budget or your hobbies.
It’s easy to keep your finances in check with these three wide buckets. For example, when you are shopping for a new place to live, this is a handy guide to help you secure a reasonable cost of living, not overwhelm you.
Returning to the 50/20/30 Budget Rule | Ning’s money