Looking for a new, easy way to make a budget? Look no further than the 50/30/20 rule. This rule splits things up into three simple categories: needs, wants, and savings.
Here’s what you need to know – your after-tax income will be split into three portions. 50% of that income will go to needs, 30% of it will go to wants, and 20% of it will go straight into long-term savings.
You can achieve these numbers per month, per paycheck, or per week, whatever works best for you. For example: $1,000 per week breaks down into $500 for needs, $300 for wants, and $200 for long-term savings.
So what’s considered a need? Needs are things like your mortgage or rent payment, utility bills, gas for your car, insurance, food, your cell phone bill and internet costs, to name a few. These all come from the 50% portion of your budget.
On the flip-side, what’s a want? Wants are things like streaming subscriptions, new clothes, going on vacation, eating out, or hobbies. Now, these are not exclusive! A vacation may be considered a need to one person, but simply a want to the next. Categorize your spending based on your needs and wants.
When it comes to saving, Allegius makes it easy. Our accounts come with a free savings account that you can easily transfer money into from your checking account. Our Share Account comes with competitive dividends, to help build your savings even more!
Learn more about the 50/30/20 rule, and use the handy budget calculator, on Banzai, available for free to Allegius members.
