The 50/30/20 rule
Maybe you’ve heard of this rule in the past but weren’t quite sure what it was. As Humphrey explains, it’s “50% Needs/ 30% Wants/20% Financial Goals.”
She adds, “The 50/30/20 rule can be adjusted but is a great budgeting resource that anyone can follow and will help you to budget better now and in the future.” But what are needs versus wants versus financial goals? Many people mistake a want for a need. Your needs are simple: they are the things you need to survive. A roof over your head (rent/mortgage), food (groceries – not meals out with friends, delivery, etc), health insurance, and things like that.