What Does a Realistic Budget Look Like?
The 50/30/20 rule is a budgeting technique that divides your take-home income into three categories by percentages. It’s a simple way to track your spending. Split your budget into Needs which take up 50%, your wants which take up 30%, and lastly your savings or debt for 20%. Here are what goes into each category:
Needs:
- Rent or mortgage
- Car payment
- Utilities
- Groceries
Wants:
- Streaming services
- Shopping
- Vacations
Savings or Debt:
- Emergency fund
- Retirement
- Child’s education
- Credit card payments
