{"id":4631,"date":"2021-12-16T06:13:31","date_gmt":"2021-12-16T06:13:31","guid":{"rendered":"https:\/\/evolveinc.io\/?p=4631"},"modified":"2022-01-11T00:43:29","modified_gmt":"2022-01-11T00:43:29","slug":"the-50-30-20-rule","status":"publish","type":"post","link":"https:\/\/evolveinc.io\/self-improvement\/the-50-30-20-rule\/","title":{"rendered":"The 50\/30\/20 Rule of Budgeting"},"content":{"rendered":"<p class=\"wp-block-paragraph \">The 50\/30\/20 rule may be an excellent tool for diversifying your financial profile, achieving dynamic savings objectives, and fostering overall financial wellness. The 50\/30\/20 rule of thumb is a <a href=\"https:\/\/evolveinc.io\/self-improvement\/simple-tips-to-manage-your-money-better\/(opens%20in%20a%20new%20tab)\" target=\"_blank\" rel=\"noreferrer noopener\">money management tip <\/a>that divides your budget into three categories: needs, wants, and financial objectives. It is not a hard and fast rule, but rather a basic guideline to assist you in developing a financially sensible budget.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-1024x683.jpg\" alt=\"The 50\/30\/20 rule\" class=\"wp-image-4632\" srcset=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-1024x683.jpg 1024w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-300x200.jpg 300w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-768x512.jpg 768w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-1536x1024.jpg 1536w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-2048x1365.jpg 2048w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-720x480.jpg 720w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-karolina-grabowska-4475523-150x100.jpg 150w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n<p class=\"wp-block-paragraph \">The 50\/30\/20 rule of thumb is a guideline for dividing your money as follows: 50% to &#8220;needs,&#8221; 30% to &#8220;wants,&#8221; and 20% to your financial objectives.&nbsp;<\/p>\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_53 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-66325bcc39b77\"><span class=\"\"><span style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-66325bcc39b77\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/evolveinc.io\/self-improvement\/the-50-30-20-rule\/#What_Is_the_Origin_of_the_503020_Rule_of_Thumb\" title=\"What Is the Origin of the 50\/30\/20 Rule of Thumb?\">What Is the Origin of the 50\/30\/20 Rule of Thumb?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/evolveinc.io\/self-improvement\/the-50-30-20-rule\/#What_Does_the_503020_Rule_Mean\" title=\"What Does the 50\/30\/20 Rule Mean?\">What Does the 50\/30\/20 Rule Mean?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading wp-block-heading\" id=\"what-is-the-origin-of-the-503020-rule-of-thumb\"><span class=\"ez-toc-section\" id=\"What_Is_the_Origin_of_the_503020_Rule_of_Thumb\"><\/span><strong>What Is the Origin of the 50\/30\/20 Rule of Thumb?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<p class=\"wp-block-paragraph \">Sen. Elizabeth Warren (a Harvard law professor when she invented the term) and her daughter, Amelia Warren Tyagi, popularized the 50\/30\/20 rule in their book All Your Worth: The Ultimate Lifetime Money Plan.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-1024x683.jpg\" alt=\"The 50\/30\/20 rule to divide finances.\" class=\"wp-image-4637\" srcset=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-1024x683.jpg 1024w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-300x200.jpg 300w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-768x512.jpg 768w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-1536x1024.jpg 1536w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-2048x1365.jpg 2048w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-720x480.jpg 720w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-oleg-magni-2733657-150x100.jpg 150w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n<p class=\"wp-block-paragraph \">It was created as a basic guideline for working-class families to use when budgeting for the future and unanticipated occurrences.<\/p>\n\n\n<h2 class=\"wp-block-heading wp-block-heading\" id=\"what-does-the-503020-rule-mean\"><span class=\"ez-toc-section\" id=\"What_Does_the_503020_Rule_Mean\"><\/span><strong>What Does the 50\/30\/20 Rule Mean?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<p class=\"wp-block-paragraph \">The 50\/30\/20 rule of thumb is a set of simple principles for budgeting. You use them to divide your after-tax revenue into the following groups.<\/p>\n\n\n<h3 class=\"wp-block-heading wp-block-heading\" id=\"50-to-needs\"><strong>50% to Needs<\/strong><\/h3>\n\n\n<p class=\"wp-block-paragraph \">Needs include expenses that must be paid and items that are required for survival. Rent or mortgage payments, auto payments, food, insurance, health care, minimum debt payments, and utilities are examples of these. These are the &#8220;must-haves&#8221; for you. Extras such as HBO, Netflix, Starbucks, and dining out are not included in the &#8220;needs&#8221; category.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"721\" src=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-1024x721.jpg\" alt=\"50% to needs\" class=\"wp-image-4634\" srcset=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-1024x721.jpg 1024w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-300x211.jpg 300w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-768x540.jpg 768w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-1536x1081.jpg 1536w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-2048x1441.jpg 2048w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-720x507.jpg 720w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943746-150x106.jpg 150w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n<p class=\"wp-block-paragraph \">Half of your after-tax income should be sufficient to meet your requirements and responsibilities. If you spend more than that on necessities, you will have to either cut down on desires or try to reduce your lifestyle, possibly by moving to a smaller home or driving a less expensive automobile. Perhaps carpooling or using public transit to work is an option, as is cooking at home more frequently.<\/p>\n\n\n<p class=\"wp-block-paragraph \">Needs are things that you can&#8217;t live without, or can&#8217;t live without very easily. They include the following:<\/p>\n\n\n<p class=\"wp-block-paragraph \">Rent <\/p>\n\n\n<p class=\"wp-block-paragraph \">FOOD Supplies<\/p>\n\n\n<p class=\"wp-block-paragraph \"> Utilities like electricity, water, and sewer<\/p>\n\n\n<h3 class=\"wp-block-heading wp-block-heading\" id=\"wants-gets-30-of-the-vote\"><strong>Wants gets 30% of the vote.<\/strong><\/h3>\n\n\n<p class=\"wp-block-paragraph \">Wants are all the things you buy that aren&#8217;t necessary. This includes outings to the movies and dinners, a new purse, athletic event tickets, vacations, the latest technological gizmo, and ultra-high-speed Internet. When it comes down to it, anything in the &#8220;wants&#8221; bucket is optional. You may work out at home instead of going to the gym, cook instead of eating out or watch sports on TV instead of purchasing game tickets.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-1024x683.jpg\" alt=\"30% to wants\" class=\"wp-image-4636\" srcset=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-1024x683.jpg 1024w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-300x200.jpg 300w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-768x512.jpg 768w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-1536x1024.jpg 1536w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-2048x1365.jpg 2048w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-720x480.jpg 720w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-pixabay-164527-150x100.jpg 150w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n<p class=\"wp-block-paragraph \">This category also covers upgrading options such as choosing a more costly steak over a cheaper hamburger, purchasing a Mercedes over a more economical Honda, or deciding between viewing television for free via an antenna or paying for cable TV. Wants are essentially all of the small things you spend money on to make life more pleasurable and engaging.<\/p>\n\n\n<p class=\"wp-block-paragraph \">Wants are things you want but don&#8217;t require to survive. They might include:<\/p>\n\n\n<p class=\"wp-block-paragraph \">Hobbies \\sVacations<\/p>\n\n\n<p class=\"wp-block-paragraph \">Digital and streaming services such as Netflix and Hulu<\/p>\n\n\n<h3 class=\"wp-block-heading wp-block-heading\" id=\"20-contribution-to-financial-goals\"><strong>20% contribution to financial goals<\/strong><\/h3>\n\n\n<p class=\"wp-block-paragraph \">Finally, strive to set aside 20% of your net income for savings and investments. This includes putting money into an emergency fund in a bank savings account, contributing to a mutual fund account through an IRA, and investing in the stock market. You should keep at least three months&#8217; worth of emergency money on hand in case you lose your job or anything unexpected happens. After then, concentrate on retirement and other long-term financial objectives.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-1024x683.jpg\" alt=\"20% for savings.\" class=\"wp-image-4635\" width=\"580\" height=\"386\" srcset=\"https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-1024x683.jpg 1024w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-300x200.jpg 300w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-768x512.jpg 768w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-1536x1024.jpg 1536w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-2048x1365.jpg 2048w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-720x480.jpg 720w, https:\/\/evolveinc.io\/wp-content\/uploads\/2021\/12\/pexels-cottonbro-3943716-150x100.jpg 150w\" sizes=\"(max-width: 580px) 100vw, 580px\" \/><\/figure>\n\n\n<p class=\"wp-block-paragraph \">Try&nbsp;<a href=\"https:\/\/www.evolveinc.in\/\" target=\"_blank\" rel=\"noopener\">Evolve App<\/a>&nbsp;to overcome procrastination. The app has journeys that will help you lead a healthy and procrastination free life. The Evolve app is now live globally on Android &amp; Apple, click&nbsp;<a href=\"http:\/\/evolveinc.app.link\/\" target=\"_blank\" rel=\"noopener\">here<\/a>&nbsp;to try for free!<\/p>\n\n\n<p class=\"wp-block-paragraph \">To read more article&rsquo;s click the link below<\/p>\n\n\n<p class=\"wp-block-paragraph \"><a href=\"https:\/\/evolveinc.io\/uncategorized\/simple-tips-to-manage-your-money-better\/\">Simple Tips To Manage Your Money Better<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 50\/30\/20 rule may be an excellent tool for diversifying your financial profile, achieving dynamic savings objectives, and fostering overall financial wellness. The 50\/30\/20 rule of thumb is a money management tip that divides your budget into three categories: needs, wants, and financial objectives. It is not a hard and fast rule, but rather a &hellip;<\/p>\n","protected":false},"author":8,"featured_media":5151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[374,1],"tags":[],"_links":{"self":[{"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/posts\/4631"}],"collection":[{"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/comments?post=4631"}],"version-history":[{"count":4,"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/posts\/4631\/revisions"}],"predecessor-version":[{"id":5154,"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/posts\/4631\/revisions\/5154"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/media\/5151"}],"wp:attachment":[{"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/media?parent=4631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/categories?post=4631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/evolveinc.io\/wp-json\/wp\/v2\/tags?post=4631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}