50/30/20 RULE YOUR SIMPLE GUIDE TO MASSIVE MONEY

50/30/20/RULE

 

Each month, split your budget into three sections.

     50% for your needs

     30% for your wants

     20% for your savings and debt

Example:

if you make $5000 net income ( after tax ), you budget would be:

$2,500 ( needs )

$1,500 ( wants )

$1,000 ( savings/debt )

  

FINANCIAL NEEDS

Your needs are: 

     Utilities

     Housing

     Transportation

     Food, water and clothes

Keep your need at 50% of your total net income.

FINANCIAL WANTS

Your wants are:

     Clothing that it's essential

     Dining out or ordering take out

     Hobbies, traveling, large house, and new expensive car

Just because you want it doesn't mean you need it.

Budget your wants within 30% of your monthly net income.

SAVINGS

Pay yourself every month towards:

     Retirement or Long-term savings

     Short-term saving for a new car or vacation

     Emergency fund of 6 - 12 months of living expense

Put 10% of your net income towards saving each month.

DEBT

Paying off your debt should be a priority.

Do so in the following order:

     High interest credit cards

     High interest or unsecured loans

     All other monthly liabilities, such as student debt, mortgages, etc.

Put 10% of your monthly net income towards your debt.

BUDGETING

Create a budget for yourself every month.

     Keep track of all your income

     Split your income using the 50/30/20 rule

     Be aware of your spending habits and cut back

Your budget will be your guide towards the financial freedom you seek.