The 50/30/20 Rule of Budgeting
A straightforward budgeting framework that helps individuals allocate their income effectively to achieve financial stability.
The 50/30/20 rule divides your after-tax income into three categories: 50% for needs (essential expenses), 30% for wants (discretionary expenses), and 20% for savings and debt repayment. This model provides a simple way to manage your finances, ensuring that you cover your essential living expenses while also saving for future goals and maintaining some discretionary spending for enjoyment.