Assessing a budget can get hard and many times frustrating. It’s hard to be financially stable when there isn’t a balance between what you spend, and save. Next thing you know its hard to pay the bills. There is a 50/20/30 guideline that outlines the big picture to help you see where your money is going and how to budget in order to make life less stressful when it comes to finances.
50/20/30 Break Down
50%: When you get your paycheck you should immediately pay your expenses, like housing, phone, utilities, car payments, etc., or at least put the money away for your expenses. This amount should not exceed 50% of your paycheck. Any bill that you have decided to add into the pile should be paid for by half of your paycheck no more. Aim for 50%
20%: This 20% should be put towards your future. This is money that should help you secure your financial foundation. For instance a savings, retirement, paying down debt, or even an emergency fund. I suggest trying not to touch it unless it is an emergency!
30%: This portion of your paycheck is dedicated to your spending habits. Keep true to this number as best as you can, so to not go over into any other portion of your budget. If you stick your hands into the savings to often you will find yourself regretting the fact that there is no savings when you really do have an emergency.
