Expense Must Be Budgeted To Fit

Expense must be budgeted to fit in with the leftover after taking out 20-25% of income from income. A common budgeting strategy is the 50/30/20 rule. The 50-20-30 rule is a money management technique that divides your paycheck into three categories: 50% for the essentials, 20% for savings and 30% for everything else.

• 50% for essentials: Rent and other housing costs, groceries, gas, etc.
• 20% for savings: Savings accounts, retirement contributions, loans, credit card payments, etc.
• 30% for everything else: Nonessential expenses like clothing, restaurants, monthly streaming subscriptions, gyms, etc.

By regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently. And with only three major categories to track, you can save yourself the time and stress of digging into the details every time you spend.