What Is the 50/20/30 Budget Rule? - Deepstash

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What Is the 50/20/30 Budget Rule?

What Is the 50/20/30 Budget Rule?

investopedia.com

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What is 50/20/30?

  • The 50-20-30 (or 50-30-20) budget rule is an intuitive and simple plan to help people reach their financial goals.
  • The rule is a template that is intended to help individuals manage their money and save for emergencies and retirement.

50%: Needs

Needs are those bills that you absolutely must pay and are the things necessary for survival. These include rent or mortgage payments, car payments, groceries, insurance, health care,

30%: Wants

Wants are all the things you spend money on that are not absolutely essential. This includes dinner and movies out, that new handbag, tickets to sporting events, vacations, the latest electronic gadget, and ultra-high-speed Internet. Anything in the "wants" bucket is optional if you boil it down....

20%: Savings

Finally, try to allocate 20% of your net income to savings and investments. This includes adding money to an emergency fund in a bank savings account, making IRA contributions to a

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