The 50/30/20 budgeting rule is a way to budget your money. Your income is split into three areas to help you know what you can spend and save.
With this guide you allocate:
- 50% of your income to 'needs'. Needs can be your rent or home loan repayments, transportation, your weekly grocery shop, debt repayments, insurances, education and utility bills.
- 30% of your income to 'wants'. Wants can be your daily takeout coffee, eating out, shopping, entertainment, hobbies and holidays.
- 20% of your income to savings. Savings can be an emergency fund, a savings goal, additional debt repayments and investments (which can include superannuation).