How many people actually implement a budget? Furthermore, how many actually break it down to the last penny or use an old standby rule to get from month to month with not only a budget that works but money in their pocket?
Truthfully, a budget is only as good as the person who put it together, whether or not they're specific or are only looking at the main payments (car, house) and fail to realize that entertainment or having fun, incidental spending and saving money for retirement or a nest egg also should play into your budget.
What a budget shouldn't be is a list of things you spend money on that are set, such as utilities, cars and your rent or mortgage. A budget is supposed to follow a steadfast, long standing rule of thumb on how to break down what you're spending your income on, and how to ensure that all is not lost on saving money, too.
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Say hello to the 50, 20, 30 rule of thumb.
What is that rule, specifically?
Anyone who has taken budgeting personally goes by this to make sure that the bills are paid, and they have it made in the shade as far as saving money and planning to retire in good standing with their financial future.
The 50 is simple; that is what you use to spend on fixed bills and cost of living, credit cards, insurance, house, cars and anything else that is tangible as far as it isn't going to change much or is going to be a consistent payment.
The 20 has your future in the palm of its hands. Whether or not those hands are good or not is up to you, and whether you take this 20 to heart. That 20 is as in 20 percent, which is what you should be taking from your pay and putting aside for your retirement. That may already include your 401K contribution, but that doesn't mean that 20 percent goes away just because you're contributing. You have to still hold that 20 percent and keep your saving means as honest as possible.
The 30 is one that we typically forget about, since money is so tight. That 30 centers on you taking 30 percent and using it for recreational use, but with a focus on grocery store stops, eating out at restaurants or a movie here and there.
If you can't budget with the 50, 20, 30 rule, then that means you need to cut from your budget, because with out the option of saving money or enjoying your income, you really don't have much of a budget at all.
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