06/04/2022
So what exactly is the principle behind the 50/30/20 budget?
The 50/20/30 numbers are a percentage breakdown of how much you can safely spend, and how much you need to save, to maintain a comfortable financial balance.
In general, under the rule:
🌞 50% of your income should be set aside for Essentials (Needs)
🌞 30% of your income is for Personal spending (Wants)
🌞 20% of your income goes straight into Savings
Essentials include unavoidable living expenses such as rent, utilities, groceries, and transport. Minimum credit card and car payments also qualify as a need.
Extra payments are filed under “Savings.” The Savings category encompasses costs such as investments, credit card payments, emergency funds, and retirement accounts.
Personal spending refers to all the non-essential expenses that you desire but can actually live without if necessary.
The beauty of this rule is that it is a simple way for novice savers to learn saving techniques, while also providing a certain amount of flexibility.
Ma Almie Rose Medina
Manager Candidate - Sun Life
Licensed Financial Advisor
0917-514-0309
[email protected]
Source: lennarmortgage.com
