THE GOLDEN RULE 50/30/20 IN THE DISTRIBUTION OF THE FAMILY BUDGET
✅This is the simplest and most well-known rule when planning a family budget - the 50/30/20 PRINCIPLE.
According to this rule, family income is divided into three parts:
🔹50% from salary - for the purchase of essential items and for meeting basic needs: food, housing, housing and communal services, transport, clothing, shoes, communications.
🔹30% from your salary - to purchase the things you want: travel, hobbies, restaurants, entertainment, fitness. These expense items in the budget are not required, but they help you feel the beauty of life.
🔹20% from family income - for savings and investments: ETF, stocks, real estate, life savings after going on retirement, other large expensive purchases and unforeseen adverse events.
🎯Recommendation: to accumulate these three types of expenses in different accounts.
Many banks allow you to have a three-account option. Because of the “physical” division of money, there is no temptation to break the rule or unconsciously spend too much.
Thus, after receiving the salary, divide the money received into three target accounts so that there is no temptation to spend more than planned or save in savings from what is left by the end of the month, and not planned.