Manage a family budget? Get to know the 50/30/20 savings rule.

Want to save with your credits and insurance wallet? Turn to Poupança no Minuto and solve the problem now. To understand how to manage your monthly budget better with the expenses you currently have, keep reading.

How to manage a monthly family budget?

Managing a monthly family budget is not an easy task. When there are fixed expenses, determining what can be spent on variable expenses can be complicated. It is also essential to have money left at the end of the month for savings or investment.

So, for this, you must impose rules so that the budget does not escape your control. From the day you receive your salary and have income to manage in the face of expenses, organization is the order of the day.

If you have expenses with rent, loan payments, tuition, taxes: those should be the first to be settled. As well as priority expenses related to essential goods and services, such as food, water, electricity, gas, telecommunications, fuel, transportation, among others.

So that later evaluate how much is left to divide between expenses for more superfluous expenses, leisure (movies, theater, culture), eating out at restaurants, clothing, personal care, and allocating part of it to savings. This savings can go towards an emergency fund as a precaution or toward an investment fund, in order to achieve future goals.

That's why there are strategies like the well-known 50/30/20 rule. Let's see how it works.

Budget management with the 50/30/20 rule.

The simplest way to have better control over your expenses is to write down in advance all your income and all your expenses.

This is where the monthly budget organization begins. And this 50/30/20 rule represents just that: tracking all expenses and dividing them into categories. In other words, each percentage corresponds to a category (fixed and priority expenses, variable expenses, and savings/investment). And the goal is not to exceed the allocated percentage in any of the categories.

This can be an excellent strategy to gain discipline when it comes to meeting the established monthly budget. It is possible to have a comfortable financial lifestyle and save hundreds of euros with this process.

Now, let's see how the formula should be applied:

• 50% of earnings should be allocated to the payment of rent, loan installments, school expenses, tax obligations, food, water, electricity, gas, telecommunications, fuel, transportation, among other fixed, priority, and essential goods response expenses;
• 30% of earned incomes can be spent on expenses associated with lifestyle, such as dining out at restaurants, buying clothes, leisure and culture (cinema, theater, museums, shows, concerts), and personal care (physical exercise at gyms, beauty treatments, among others);
• 20% of earned income should be allocated to a savings or emergency fund to prevent unforeseen events, achieve future projects, prepare for retirement, etc.

So, organizing and planning the entire budget according to this strategy brings greater financial freedom.

To do it in the long term, it is important to remember the regular expenses. For example, always note when you will have to settle certain tax or installment obligations, such as paying taxes or paying for insurance.

Therefore, by advancing with the rule 50/30/20, you already know, from the start, which months the 50% percentage will have to be adequate. If in three months, in November, you have to pay the Municipal Property Tax (IMI), or if you need to pay the life insurance associated with the home loan in the next semester, adjust the rule for those months in advance.

If you need help with housing credit issues, credit intermediaries Poupança no Minuto are available to assist you. With a free service, they answer all your questions so that your credits and insurance portfolio are not a problem.