What is the 50/30/20 budget rule and how to plan it?

What is the 50/30/20 budget rule and how to plan it?

According to the 50/30/20 budget, you can spend about 50% of your after-tax dollar on necessary items.

Furthermore, keep only 30% of your income for wants and at least 20% for savings and debt repayment.

Under 50% of expenses, some of the needs include groceries, housing, insurance and transportation.

Wants can include gifts, dinners out, travel and entertainment.

Most importantly, 20% of your after-tax income will be saved for the future and pay off any emergency expenses or debt.

Think of the bigger financial picture to accomplish every pressing goal, including starting an emergency fund.

Choose the right budgeting plan according to your needs and wants.

Ensure to track and monitor your financial and budgeting progress to make unforeseen changes or enjoy little moments.