Managing Money Using the 50-30-20 Rule: A Visual Representation
Author: Marko – WhiteBoard Finance
📌Keywords: personal finance, stock market, cars, real estate investment, making money online
Welcome back to Whiteboard Finance! My name is Marko and I’m here to help you manage your money and build wealth. Today I want to talk about how to use the 50-30-20 rule to manage your money.
📊 Poll Results
I recently ran a poll asking what type of videos you would like to see on your channel. We received an overwhelming response of 834 votes. The result is as follows:
– 30% said they wanted personal finance videos.
– 22% said they would like a video about the stock market.
– 18% said they wanted videos about cars.
– 17% want to know more about real estate investing.
– 13% said they wanted to learn how to make money online.
Comments on the survey have been really encouraging. Many people express a desire to learn new things. Thank you everyone for your votes and contributions!
🎯 50-30-20 Rule
So what is the 50-30-20 rule? Let’s break it down. Imagine a pie chart where the right half of the circle represents 100% of your budget. In this case, 50% can be used for your needs, 30% for your needs, and 20% for savings and debt repayment.
💰 Required (50%)
50% of necessities include daily living expenses such as food, housing (whether mortgage or rent), insurance and utilities. Needs are basically things that would cause you great inconvenience or would make it impossible to survive without you, such as food and shelter.
🛍️ Wish (30%)
The next logical area to consider is desire. Desires are things that may cause a slight inconvenience in your life but are not absolutely necessary. For example, you might want to buy new clothes or go to a restaurant. Wishes are things that improve your quality of life or bring you happiness.
💵 Savings and Debt Repayment (20%)
The last 20% of your income goes towards savings and paying down debt. This may include setting up an emergency fund for 6 to 12 months of living expenses as well as retirement savings. When it comes to debt, it’s important to pay off high-interest debt first using methods like debt avalanche or debt snowballing.
✅ Make a monthly budget
To effectively manage your money using the 50-30-20 rule, it’s important to create a monthly budget based on your net (after-tax) income. Breaking down your income into these percentages will help you better understand where your money is going and ensure it’s allocated appropriately.
👀 Don’t forget to share!
If you found this information helpful, please share it with a friend or family member who might also benefit from it. I believe that by sharing knowledge we can help many people improve their financial situation without asking for anything in return.
Thank you for your support and have a great day!
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