50/30/20 Rule Explained | Is the 50/30/20 Budget Right For You?

50/30/20 Budget Rule. This budget strategy is one of the most popular budgeting methods currently in use today. It is a great style of budgeting for beginners.

It offers up a style of flexible spending that many people really like.

So here’s what it looks like in practice.

Using the 50/30/20 budget, 50% of your income goes to your needs, 30% goes to your wants and 20% goes towards your savings (or accelerated debt repayment).

So long as you stay within those ratios, you can spend as much as you want on the individual items in each category. That’s why some people consider this a more flexible spending style.

It is also considered a simple style of budget as it is really a basic three bucket approach. Those three buckets being needs, wants and savings. Once those categories are established, then you can spend as you so choose within those categories.

There are literally dozens and dozens of ways to budget your money. All of them have the same budgeting basics. They all have the same end goal. To help you save money, repay debt (get out of debt) and have good financial habits. They may have different method of getting to that ultimate end goal…but nonetheless that end goal is the same with all budgeting strategies.

Budgeting is one of the very best things you can do to ensure that you reach your financial goals.

There is no right or wrong way to budget. What maters most is that you choose the budgeting method that you like best, the one that works for you and one that you can stick to long term.

50/30/20 is incredible popular.

Try different budgeting strategies to see which ones work for you.

I will be doing a full video in each budgeting strategy, so stay tuned for many future budget videos.

Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.

Interested in starting your investing journey, head on over to Vanguard or Fidelity and open your account today, it will only take 10 min to open up your account.

#financialindependence #budget #budgetingforbeginners #personalfinance

[IsFIREforme]

I like that there are so many different types of budgets. Not every budget works for every household and it gives people options but they can still be responsible and successful with their money. Just like you said at the end

[TradingWithCJ]

This rule is a pretty good one to stick to! Budgeting is so important!!

[TBIhope]

This was the very first budgeting rule I learned! But then I went to Ramseyland (that’s what I’m calling the Dave Ramsey Network now)!

[educatedwanderer]

I'm already at 30, 30, 40 having paid off my house and I'm trying to reach FI so I can use the 3% rule in retirement.