Have you learned how to live on a budget? Are you working towards a better chance tomorrow? Creating a budget today will formulate a prosperous tomorrow, and it will allow you to achieve everything you wish. While we are all not given the same base to start, for we are all given the same opportunity to create something for ourselves. Learning how to live on a budget will allow us to build what we did not have at the start.
The 50/30/20 rule is simple, yet it does take some effort to start. It starts that 50% of your net income goes to living expenses, which are necessities, 30% goes to wants, and 20% goes to savings/debt expenses.
The easiest way to get started with this project is to take your monthly income and divide it to 3 sections. Take 50% of your income and put into that area your necessities for life. This section may include –
50% Living Needs –
The next section, which commands 30% of your salary is your wants, or entertainment expenses –
30% Entertainment –
The last section, which stands at 20% is allocated to savings, and is put away to not be seen for some time in the future –
20% Savings/Debt Expense
**note this section is considered in addition to any funds that are withdrawn from your paycheck to a payroll contribution to a 401k or a PSP Plan.
It is important to put this plan into action immediately, and allow this plan to become part of your daily habit. There are many ways to keep track of this through spreadsheets, and in time, you will learn what you can and what you cannot spend on a regular basis. It will allow you to search for areas where you can save money, and purchase items ahead of time so that you will save money over the long haul.
Make sure to track your progress. Utilize your past bank statements to review how you have been spending your money, and when you are able to put away money each month – it may be in your best interest to open a couple different spending accounts.
An easy way to save is to open an online high interest savings account that withdraws from your monthly paycheck each month. Many of these accounts offer .50% APY to 1% APY, and over time can have exponential benefits with minimal taxes over the course of the account. Furthermore, you will learn how to save, and find other avenues that will allow you to place your income into these accounts that will not create unnecessary expenses.
The key to this exercise is to learn how you can save everyday with minimal changes, and learning that you can achieve your biggest goal without stressing over every penny.
Everyone needs a coach, and I am able to help you in any area where you have questions. Send me an e-mail to firstname.lastname@example.org , and title it – “50/30/20 Rule.”
Remember to achieve great results you must stand on the shoulders of those who are working to their goals.