How the 50/20/30 Rule Can Help You Create a Safety Net
Are you winging your financial future? By the looks of it, it seems that 66% of Americans don’t have a budget. But what if you did a staredown with your bank account? It may be intimidating, but it doesn’t have to be.
In this video, learn about the 50/20/30 Rule—the percentages that will help you remember how to divide your money for flexibility and security, right when that paycheck comes in.
And, for some Cliff’s Notes, here’s a rundown:
- 50 percent of your paycheck is for essentials—that fixed income that will go towards food, shelter, laundry, gas, water, power, phone, internet bills, and any potential emergencies if things go south.
- 20 percent of your paycheck will pay off those past debts and student loans, and let you invest in the future.
- 30 percent of your paycheck lets you save for that vacation or buy that special something for someone. Seems weird to not put 30% of your paycheck towards savings and debts, but think about it this way: living well lets you do good.
Watch the video to learn more about how your budget can let you save over time so that eventually, you can grow out of the 50/20/30 rule.
From our partnership with Chase, we bring you another edition of GOOD Money’s “Everyone Should Know”—a place where interns to entrepreneurs to permalancers to any human can understand how to make the most of their money so that they can take the smartest steps towards living well and doing good.
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