The 50/30/20 Budget Rule and Frugal living
I have covered various topics related to budgeting and saving which you can check on my profile. Now, I'm going to emphasise on two major and important budgeting strategies that if you applied on your budget sheet, you will be prosper and less worried.
Okay first and foremost what is the 50/30/20 budget rule actually. In simple words:-
50% budget is set for the basic Necessities This budget strategy is very popular among the wise people who followed this strategy for years now and still believe in it. In this strategy all you need to do is allocating your total budget into three major categories which I mentioned above. Let's throw a little bit light on each category thoroughly below. Here you go, This type of living doesn't mean depriving yourself of the things you want or like. It is the type of living which you adopt only to achieve your financial goals. In this living standard, you become more mindful with the spendings and finding some ways to cut the cost which ultimately reduce the financial stress. This includes:- Buying Groceries in Bulk:- there is a huge cost cutting difference between buying in chunks and buying in bulks. You might get a chance to discount on your shopping. But make sure you are using cash instead of credit cards in order to stick to your budget Meal planning:- you can make a list of what do you wanna make in an upcoming week so that you can choose the dishes according to your availability of the required items to prepare meal. Reducing Energy Consumptions:- there could be many ways in one's life to reduce this energy consumption where you easily cut the cost such as stop using electrical cookware every-time, turn off the room lights or AC when you leave the room for a certain time of period, and many more ways Using Coupons at the time of shopping:- there are many online websites where you can find coupon codes or maybe at you nearest store. Just avail them if you get a chance Finding Affordable Entertainment Options:- it totally depends on the one's standard of living that how they want to get entertained. But be mindful while choosing an entertainment spots I'm winding up this article with a reminder that set your budget first then spend accordingly in order to get sustainability in your life. BE MINDFUL Posted Using LeoFinance Beta
30% budget is for Discretionary Spending
20% budget is for Savings and Debt Repayment
Image by Steve Buissinne from Pixabay
NECESSITIES
This category includes non-negotiable expenses such as transportation, healthcare, groceries, utilities, and house rent if one renting out. All of the expenses must be paid on time every month to live worry-free. This is why 50% of your total salary should be dedicated to these things priorly.
DISCRETIONARY SPENDINGS
This category includes all of the non-essential expenses to keep fun in your life. It includes spending on hobbies, shopping, dining out, and entertainment. So dedicating 30% of your income should be enough to maintain the flexibility but make sure you are under control and stick to the budget.
SAVINGS & DEBT REPAYMENTS
Saving and investing for the betterment of your future is MUST so focusing on it and allocating 20% of your budget is enough. This category includes debt repayment, investments, and savings. Prioritise what do you want to do with this 20% budget whether to invest or to save, or paying down payments.