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Why cry on debt when you have 50-20-30 budget

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By: Phil Bradford
on 23rd Nov,2017

Get to know how to keep your head straight by staying away from debt with these simple 50-20-30 budgeting steps.
Why cry on debt when you have 50-20-30 budget

Aristotle predicted that the omission of Oligarchy and more importance of aristocracy and democracy will result in Athen's downfall. We are talking of a civilization here. If we shift our eyes to you, then imagine how prone are you to destruction.

We humans created currency; it is us who discovered the generalized value for all terms - money. So, it is upto you how you will manage and how you will spend this word.

Let's say we all have demands, yes we do, and it is good to have so as what is a human without desires. But only when we try to fulfill them do we run short of cash.

Yet don't you worry.

Whoever you are, be it a businessman, a single parent or a newbie earner, or a man crushed between hard pounding of debts, you will find the easy way out.

You have a simple formula here, what we management people love to call it the 50-20-30 budget, for your benefit and easy understanding.

Without further delay, let's come down straight to the objectives of this budgeting procedure.

1 Having a firm footing and understanding the primal needs (50% of your income)

We all complain that we spend more than what we want but are unable to control the outgoing of cash.

This can be given an awarding solution if you keep aside 50% of your total income for basic needs and necessities. These will include your daily transport's fare, your bills, your fooding, rents, taxes and also any debts left to be paid.

You will notice that you have a handsome amount spared to compensate your regular expenses. You will worry less and can concentrate on your life in a better headache free way.

This management will not only help you control your expense but will give a calculative approach to personal financial problems.

2 Contribution for a secured future - The savings (20% of total income)

If you are done with the first cutting of the half of your salary, you will be now left out with the other half to use it wisely. So straight away deduce 20% of your left out income and put it down for savings.

You can either make a term deposit in a bank account or can add it up to your own personal savings. Opening an account for savings is better as it will have interest values from banks, which will add up to your savings value on a term end basis.

This part is usually the most important for starters as they have little knowledge of credits and have a huge tendency to fall fatal in hand of debts.

It is also a basic approach for anyone who is tensed about savings or is a reckless spender.

It will help them understand the value of this procedure when they get a huge turn back from their savings after a year or so.

3 Take it at ease and enjoy (30% of total income)

Now as we are done with the settlements for our basic lifestyle, we can dedicate the attention to our wants and desires. Here you will get the chance to strike out 30% of you income.

This amount will be completely yours own. You will spend this for your entertainment, luxury and happy living. This will include your holiday trips, clubbing, pubbing , movies, dates and so on.

Even though you have a decent amount to spend, be aware of the fact not to overspend much. You need to be sensible out here too as expensing more will result in debts and other casualties.
Whenever you feel you need more money for your livelihood, don't cut down from the first two investments, but reduce it from this 30% of your income. Savings and necessities are more important than luxury and fantasies.

As you are an earning man, you got to be sensible and intelligent .You must learn to look in your pocket first before you make expensive decisions.

This life is yours; if you make a mistake you will have to pay the penalty yourself. This strategy of 50-20-30 budget is designed exclusively to elude future caricature of debt consolidations and other monetary issues. So if you can maintain this total structure of breaking your monthly or annual income, you will have less financial problems to handle in life.
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