Saving money can be hard. But having a budget is one of the best ways to keep your savings goal on track.
The 50/30/20 Rule is a popular budget that splits your income into three categories. One of these categories is savings, so it encourages people to set aside some of their income for a holiday, a rainy day, or a home deposit.
What is the 50/30/20 rule?
50% of your income is spent on needs. These are the items that are essential and can’t be left out, such as rent, car payments, utilities and insurance.
30% is spent on wants. These expenses aren’t necessary for your day-to-day living, such as dining out, travelling, entertainment and coffee purchases. And yes, that does include your Netflix subscription!
20% should go towards your savings. This is what’s left after your expenses above, although many people set up automatic transfers into a savings account.
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