The first thing we want to share with you is that with the 50 30 20 rule it is possible for you to save and identify the leakage of your money on things that might actually be unnecessary.
The 50 30 20 rule was created for Elizabeth Warren (law professor, politician and consumer advocate), along with her daughter Amelia Tyagi (economist and author of the book “All your worth: the ultimate life time money plan”.
Basically what the rule proposes is to allocate 50% of your income to cover your basic needs such as housing, food, utilities, health insurance payments, among the main ones.
The other 30% could be destined to the payment of certain expenses such as clothes, shoes, dinners or outings. While the final 20% would be dedicated purely to savings for future projects.
Whether you are an investor, a small businessman or an employee, this is a rule that can be very useful.
So you can start using the 50 30 20 rule:
- Identify your net income.
- Keep in mind what your expenses were in the last month so you can see what your recurring expenses are.
- Evaluate and make the appropriate adjustments to maximize your savings capacity.
Although you may think that this is a strict rule, it does not mean that you have to stop giving yourself some treats or stop enjoying yourself. On the contrary, in the end you will be able to get much more than what is diluted in the day to day.
We hope that this simple proposal can help you improve your saving capacity and achieve your major objectives in the short, medium and long term.
Source: www.infobae.com
