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Money management

If you struggle with managing your money, but find traditional budgeting apps or techniques too complicated or time-consuming, the 50-30-20 rule could work for you.
This is perhaps the simplest budgeting strategy, but this simplicity is what has made it so effective for so many people.
With the 50-30-20 rule, you split your after-tax income into three categories:
If you have debt, you should use your savings fund to pay that off.
The 50-30-20 rule is believed to have originated from Elizabeth Warren and Amelia Warren Tyagi’s book, “All Your Worth: The Ultimate Lifetime Money Plan”.
However, this strategy has proven to be so effective that it has been mentioned within several personal finance books and blogs since.
You calculate your monthly after-tax income (do this every month if you need to). Then, multiply this amount by 0.5 (needs), 0.3 (wants) and 0.2 (savings).
These are your monthly budgets for each of the three categories. It’s up to you to make these totals work for your life.
A lot of people have used their desire to stick to the 50-30-20 rule to reduce their living expenses (perhaps by switching bill providers, wasting less food or cycling to work). Others have used it as motivation to cut back on frivolous shopping sprees.
Of course, there is no-one waiting to stop you breaking this rule, so you’ll need discipline in order to keep to it.
Here are some tips to help ensure you successfully apply the 50-30-20 rule in your life every month.
Yes, there are more complex savings strategies which may work better. But if you’re not saving money at all, the 50-30-20 rule is a good place to start. The simplicity and low maintenance of this strategy is unlikely to intimidate you, meaning you’re more likely to begin saving and stick at it.
Before you know it, you could have saved enough money to buy the things you really want in life.
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