everything in summer bills. Vacations, meetings with friends at the beach bar, social gatherings multiplied… allocating part of our salary to savings. And not just in the summer.
If we want to have a pillow for the unexpected or if we are thinking of buying a house or a car, we will need some things. save money. While this goal may seem like science fiction from a bank statement, the reality is that we can achieve it. How? Well, to follow one of the most recommended rules by experts on the subject. about 50-30-20 rule and we will tell you what it consists of.
What is the 50-30-20 rule?
This rule is a save method created by Elizabeth Warren teacher Harvard He laid it out in his book “All You’re Worth: The Ultimate Lifetime Money Plan.” Its operation is very simple. It is enough to allocate half of your earnings to basic expenses; 30% of your salary will go to personal expenses, the remaining 20% will go to the piggy bank.
Now, once we have We have divided our payroll into three groups. It may be necessary to define exactly what expenses are included in each of the first two (basic expenses and personal expenses). Let me see you.
What are the basic expenses?
According to Warren’s rule, 50% of our income should be used to cover all expenses. “basic expenses” But what are really basic expenses? Expenditures, which the Harvard professor defines as fundamental, housing and Food. Electricity, water, internet or mobile phone bills are also included in this group.
What about personal expenses?
The second part to which we dedicate our salary is called. “personal expenses” and includes clothing, gym, leisure activities and outings with friends, among others.
We allocate 30% of our budget to these activities. However, this is definitely the hardest part to keep away from.
It is possible to save 20% of what we earn
After our basic and personal expenses are covered The rest of the profit will go to savings. In this way, and almost unconsciously, we may have an economic residue that will gradually increase. This way, when the next holiday comes or an unforeseen event occurs, we can use that money and face the extra expense without much hassle.
Source: Informacion
Calvin Turley is an author at “Social Bites”. He is a trendsetter who writes about the latest fashion and entertainment news. With a keen eye for style and a deep understanding of the entertainment industry, Calvin provides engaging and informative articles that keep his readers up-to-date on the latest fashion trends and entertainment happenings.