According to the specific 50/30/20 rule you are supposed to divide your monthly salary into three main parts:
1. 50% must be set aside for your basic expenses such as rent, electricity, water, food for the month, car, transport, and other similar costs;
2. 30% must be set aside for all those things you have decided to buy, but which are not included in the top category. Going out, cinema, theater, bars, etc. are also included here.
3. 20% (minimum) must be reserved for savings.
Let’s take an example. Your salary is $1200, of course, we take the net value of your monthly salary. How are you expected to follow the 50/20/30 rule? – For all major costs such as household, car, rent, electricity, water, etc. you should pay $ 600 of your salary to cover your needs;
– For entertainment and side purchases – $ 360;
– You end the month with $240 minimum in saving
The rule is hard to follow if “Saving” is not familiar to You. Persistence is the key for this strategy to work for you.
Of course, it can be re moduled depending on your expenses. (Monthly Bills, Rent, Job Hours and etc)