The Life changing Budget Rule : 50/20/30 Budget rule

Life changing Budget Rule: 50/20/30 Budget rule

The 50/20/30 rule is one of the simplest rules I’ve seen. All you need to do give 50 per cent of your income to your needs and 29 per cent to your savings and 30 per cent to your wants

Your wants are all your needs that are not so important at that moment, they are the things you can do without overtime.

Please who brought about this rule? 

It was Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan where she gave the 50/20/30 budget rule.

Life changing Budget Rule: 50/20/30 Budget rule

• How do you do the 50/20/30 Budget rule
• Why you need this Budget rule 
• What it would help you achieve
• Is it suitable for students?
• What is the 50/20/30 Budget rule  all  about

• Table of Contents

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  The 50% rule

• The 20% rule

• The 30% rule

• How to stay within your budget limit
• How to cut down expenses to save more
• Reasons why you need this rule to start your saving  journey
• Conclusion

Why you need this Budget rule

This rule is one of the easiest budget rules have seen but not so detailed though. It’s more of a general term being used here. So if you are not so disciplined with the money I think you need to learn discipline to succeed with this rule.

What it would help you achieve

We all want to be in that position where we don’t have to worry about our debt but about how we have some money in the bank waiting for us.

It’s living a financially free life. But you don’t do this by sitting and always talking about it. You achieve financial freedom by doing and this is what this budget rule would help you do.

Is it suitable for students?

Yes, it is suitable for students. I’m saying this because a student’s greatest expenses now, would be paying your student loan. So you know your greatest need now is paying your student loan, so you have to budget towards it.

What is the 50/20/30 Budget rule  all  about?

The 50/20/30 rule is all about diving your income after paying tax into several portions to help you live a financially balanced life. We should start on with the 50% rule

The 50% rule:

The 50 per cent rule helps you divide your income into two parts and giving 50 per cent of that income to your needs. And as humans, we have so many important things in our lives that we need money for. This is the segment of your budgeting list, you put all your important financial expenses.

The 20% rule:

The 20 per cent rule is a life-changing habit for anyone ready and willing to use this budget rule. This 20 per cent rule helps you build the habit of saving.

Yes, we all know saving especially with low income is hard because at this point your budget outweighs the income you have. So it’s takes the act of discipline to do this.

The 30% rule:

The 30 per cent rule covers all your miscellaneous expense like, going out with friends and buying fashion items that you don’t need like following the trend.

Literally this percentage of your budget covers your personal spending so be caustious when you spend, so you don’t go above your limit.

How to stay within your Budget limit

The only thing I can say we can do to stay within our spending limit is knowing that you are sure that we are tired of going through the same phase of being in debt,

and always complaining you don’t have money.

At this stage you don’t need any outside motivation but there would be an inward motivation help you to stay within your budget limit.

Also, you can stay within our budget limit by building your good personal habit like discipline. It would help you go a long way.

We can also go into a challenge with our friends to help us achieve our goal.

How to cut down expenses to save more

How do we do this?

We can achieve this by simply giving more attention to our most important needs. Because sometimes we see everything as important for us to buy but they are not.

So we should give time to ourselves and ask ourselves questions about why we need to get that particular item. Or you can use the 30 days rule or the 10 seconds rule.

• Reasons why you need this Budget rule to start your saving  journey

There so many reasons why we need this rule to start our savings journey.

The most important one is to have a financially secured life without debt.

Conclusion 

The 50/20/30/  rule can be used for all individuals. no matter the age.

As long as you are receiving an income and you don’t want to live in debt you should be able to use this for your finances.