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What is the 50/30/20 budget rule?

This intuitive and straightforward rule can help you draw up a reasonable budget that you can stick to over time in order to meet your financial goals. The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do.

Should you use a 50/30/20 budget?

The 50/30/20 is often suggested for beginners because it’s easy to use and set up. It also leaves a lot of room for variation, as long as you’re staying within the correct spending ratio. But as a long-term budgeting strategy, the 50/30/20 budget might not hold up as well as a traditional line-item budget.

What is the 50-30-20 budget rule?

The 50-30-20 budget rule is very simple, and it only has a couple of steps to get started. Here are some tips to make sure the budget works well for you. To get started, you need to figure out your after-tax income. After-tax income is simply the amount of money you have left over after taxes are paid.

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