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.
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The 50-20-30 rule
It is a budget rule to help people reach their financial goals. It states that:
- You should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-do.
- The remaining half should be split up between 20% savings and debt repayment and 30% to ev...
The 50/30/20 Rule
It breaks down your budget categories into three broad segments:
- 50%: Essential Expenses like housing, automobile expenses, groceries, insurance, utilities, etc.
- 30%: Discretionary Expenses (Non-essential) like Dining out, entertainment, drinks, etc.
How much you should save every month
The popular 50/30/20 rule states that you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and 20 percent for savings.
But it's not that simple. If you're a high earner, you'd be wise to save a larger percentage of your inco...
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