2. Devise a Budget
The next step is Devising a Budget which includes all the essentials to living within your means and saving enough to meet your long-term goals.
The 50/30/20 budgeting method offers a great framework. It works like this:
- 50% of your take-home pay or net income (after taxes) goes toward living essentials, such as rent, utilities, groceries, and transport.
- 30% is allocated to discretionary expenses, such as dining out and shopping for clothes. Giving to charity can go here as well.
- 20% goes toward the future—paying down debt and saving for retirement and emergencies.
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Student, Eager to learn either through life , experiences or people, Passionate about the things i love #passionate .. #explorer
In today's world everybody is just in a Rat Race when it comes to Finance due to which their Financial position will remain unchanged. Further, making your present comfortable is important but what about your Future and due this the topic "Personal Finance" has a much greater importance in our lives for making our present as well as our futures better while meeting the needs and wants gap.
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The 50/30/20 Rule
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- 30%: Discretionary Expenses (Non-essential) like Dining out, entertainment, drinks, etc.
The 50/20/30 budgeting method
With the 50/20/30 budgeting method:
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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.
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