The 50/30/20 Budget: What It Is and Why You Need It

Sabrina Paparella

When it comes to your finances, do you take a head-on or head-in-the-sand approach? If you identify with the latter, then the good news is, you're not alone. The bad news? You're not alone. New data suggests that when it comes to managing money, women are not as independent as you'd expect. In fact, 91% of women in couples are not participating in financial decisions. But we want to change that statistic. To help you become a master of your own finances, we're debuting a new series called The Paper Files, where we uncover tricks and tips that will help you manage your money and your future. Ready to take it head-on?

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Original Illustration by Stephanie DeAngelis

Knowing how much to budget and which areas to budget for can be murky waters to navigate. The amount financial experts recommend distributing toward a savings account can either be overly complicated or flat-out unrealistic. This is where the 50/30/20 budget can help smooth out some confusion. The process is straightforward: Put 50% of your net income (or take-home pay) toward the essentials, 30% toward personal spending, and 20% toward savings. Keep reading to learn more about the 50/30/20 budget and how it can help you get a clearer understanding of your expenses.

Did you know you can save $3000 a month without even noticing? Read our tips for saving $100 every day by cutting small expenses.

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