<ul><li>50% of your income goes toward essential expenses: rent, bills, minimum debt payments. </li><li>15% percent goes to retirement savings. They also suggest you increase this by 1% each year. </li><li>5% goes toward unexpected monthly expenses or building an emergency fund.</li></ul>What you do with the rest of the money it’s up to you.

The 50/15/5 rule for multiple financial goals

Money & Investments

<div>
When you're trying to get your finances together, there's usually a question of trade-off. Do I pay off debt or save for an emergency? Do I save for retirement or a home down payment? Fidelity's 50/15/5 rule addresses the most important financial goals by allocating your paycheck accordingly. 
You've probably heard of the 50/20/30 rule and the 80/20 rule (If not, we've <a href="http://lifehacker.com/adult-budgeting-101-how-to-create-your-first-budget-in-1440446091#_ga=1.239019008.1662698338.1411053142">written about them here</a>). Both are general budgeting rules of thumb that help you decide how to divvy up your income. The 80/20 rule is focused on your financial goal, whereas the 50/30/20 rule is focused on balancing your spending.
<a href="http://lifehacker.com/adult-budgeting-101-how-to-create-your-first-budget-in-1440446091#_ga=1.239019008.1662698338.1411053142"><figure><img src="https://i.kinja-img.com/gawker-media/image/upload/s--iPt0gNg4--/c_fill,f_auto,fl_progressive,g_center,h_77,pg_1,q_80,w_137/1922g2xhp6tjcjpg.jpg"> </figure></a><div>
Financial advice isn't an exact science, so it's hard to really sift through the cruft...
<a href="http://lifehacker.com/adult-budgeting-101-how-to-create-your-first-budget-in-1440446091#_ga=1.239019008.1662698338.1411053142">Read more Read </a> </div> 

Fidelity tosses another rule of thumb into the ring. Their 50/15/5 rule focuses on balancing multiple financial goals. Here's how it works:
<ul>
	<li>50% of your income goes toward essential expenses: rent, bills, minimum debt payments. 
</li>
	<li>15% percent goes to retirement savings. They also suggest you increase this by 1% each year. 
</li>
	<li>5% goes toward unexpected monthly expenses or building an emergency fund.</li>
</ul> 
Of course, this doesn't add up to 100. So what do you do with the rest of the money? That's up to you. You can increase your retirement savings, save for another goal, or throw more at your debt. It depends on your financial situation. The main goal of this rule seems to be making sure you're saving for retirement and building an emergency fund. Like any budget rule, you can also adjust the numbers in each category as you see fit.
It's not a guideline for everyone. If you're living hand to mouth, your paycheck may barely cover your living expenses. But if you're trying to balance multiple financial goals, this is a solid rule to consider.
Fidelity also has a budget checkup tool to see how your actual savings and spending compare with their guidelines. You can <a href="https://communications.fidelity.com/pi/calculators/budgetcheckup/">try it for yourself here</a>. And t learn more about their 50/15/5 rule, check out the full article at the link below.
<a href="https://mymoney.fidelity.com/content/50155-guide-simple-approach-budgeting">The 50/15/5 Guide: A Simple Approach to Budgeting</a> | Fidelity
</div>

When you're trying to get your finances together, there's usually a question of trade-off. Do I pay off debt or save for an emergency? Do I save for retirement or a home down payment? Fidelity's 50/15/5 rule addresses the most important financial goals by allocating your paycheck accordingly.

Money

When you're trying to get your finances together, there's usually a question of trade-off. Do I pay off debt or save for an emergency ? Do I save for retirement or a home down payment ? Fidelity's 50/15/5 rule addresses the most important financial goals by allocating your paycheck accordingly.

You've probably heard of the 50/20/30 rule and the 80/20 rule (If not, we've <a href="http://lifehacker.com/adult-budgeting-101-how-to-create-your-first-budget-in-1440446091#_ga=1.239019008.1662698338.1411053142">written about them here </a>). Both are general budgeting rules of thumb that help you decide how to divvy up your income. The 80/20 rule is focused on your financial goal, whereas the 50/30/20 rule is focused on balancing your spending.

<a href="http://lifehacker.com/adult-budgeting-101-how-to-create-your-first-budget-in-1440446091#_ga=1.239019008.1662698338.1411053142"></a>Financial advice isn't an exact science, so it's hard to really sift through the cruft... Fidelity tosses another rule of thumb into the ring. Their 50/15/5 rule focuses on balancing multiple financial goals. Here's how it works: <ul><li>50% of your income goes toward essential expenses: rent, bills, minimum debt payments. </li><li>15% percent goes to retirement savings. They also suggest you increase this by 1% each year. </li><li>5% goes toward unexpected monthly expenses or building an emergency fund. </li> </ul>Of course, this doesn't add up to 100. So what do you do with the rest of the money? That's up to you. You can increase your retirement savings, save for another goal, or throw more at your debt. It depends on your financial situation. The main goal of this rule seems to be making sure you're saving for retirement and building an emergency fund. Like any budget rule, you can also adjust the numbers in each category as you see fit.

It's not a guideline for everyone. If you're living hand to mouth, your paycheck may barely cover your living expenses. But if you're trying to balance multiple financial goals, this is a solid rule to consider. Fidelity also has a budget checkup tool to see how your actual savings and spending compare with their guidelines. You can <a href="https://communications.fidelity.com/pi/calculators/budgetcheckup/">try it for yourself here </a>. And t learn more about their 50/15/5 rule, check out the full article at the link below. <a href="https://mymoney.fidelity.com/content/50155-guide-simple-approach-budgeting">The 50/15/5 Guide: A Simple Approach to Budgeting </a>| Fidelity

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Budget for Multiple Financial Goals With the 50/15/5 Rule

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Budget for Multiple Financial Goals With the 50/15/5 Rule

The 50/15/5 rule for multiple financial goals

IDEAS ABOUT

MORE LIKE THIS

What Is the 50/20/30 Budget Rule?

5 Simple Steps to Creating a Budget That Actually Works

What Is the 50/20/30 Budget Rule?

It's time to

READ

LIKE

A PRO!

Bite-sized knowledge
to upgrade
your career