The account balance can create a bad mood even before the end of the month. With the 50-30-20 rule, you can divide your income sensibly and save a small fortune at the same time.
The 50-30-20 rule – This is how wealth is built up
Many people fail to put some money aside on a regular basis, and as a result, their account balance drops significantly. But this way you can neither make larger investments nor save a financial cushion. With the 50-30-20 rule, on the other hand, a small fortune can be built up over the long term and looking at the account balance towards the end of the month is definitely more pleasing. Because with the 50-30-20 rule, the salary is divided into three different spending or savings areas as a percentage, so you firstly have a financial overview of your finances and secondly the monthly budget is adjusted so that there is always something left over. A little tip: For all parts of the scheme, it is advisable to create separate accounts and create standing orders, because then you are not even tempted to use the money elsewhere.
The 50 percent
Half of the income is set aside for basic expenses and monthly fixed costs. Basic and fixed costs include running costs such as rent, electricity, car, internet, mobile phone, groceries and other fixed expenses. Here it is worth opening a second account, to which this 50 percent of the salary is automatically transferred every month. The second account is offered by many banks free of charge for the current account.
The 30 percent
30 percent of the monthly budget can be used for all your own needs and wishes that you want to fulfill. This includes, for example, going to restaurants, holidays, hobbies, shopping and much more. However, if larger trips or purchases are planned, some of this part should be set aside to avoid exceeding the budget. In order to find out how much or little you have actually already spent and how much of the 30 percent can be set aside for higher expenses, it is worth keeping a budget.
The 20 percent
The last fifth of the monthly salary is either saved as a reserve for financial bottlenecks or used to pay off ongoing payments. This part of the income can become important faster than expected, since unexpected repairs can arise, a high bill flutters into the house unforeseen or suddenly unemployment is in the room. Either way, a small fortune will very likely build up over time, which guarantees financial security.
Other saving measures also help to build wealth
It’s not just the 50-30-20 rule that helps with wealth accumulation, because other simple measures can still be used to save easily. A few small changes in heating behavior can help to reduce electricity bills and, just before the end of the year, it is worth doing a financial overview to save on taxes. For couples or single parents with children, it is also advisable to think about building up assets for the offspring, as they should start life without financial worries.
Editorial office finanzen.net