Have you received your salary yet? Remember the 50/30/20 income management method.
If you have already received this month's salary, pay attention to this rule that you can start applying to your monthly income in order to save.
Start managing your income using the 50/30/20 method.
When receiving the salary of the month, with the payment of fixed expenses and many others that arise, the management of money can be a challenge. But there are some methods that aim to help in monthly organization, such as the 50/30/20 method.
This is a method that "helps manage the family budget efficiently, simply, and sustainably," according to the Ei - Education and Information website from the Mutualista Montepio Association, quoted in Notícias ao Minuto.
"The basic principle of the 50/30/20 rule consists of distributing net income into three categories of expenses: needs, wants, and savings (or debt repayment)," reads the text.
We will then see how the division of monthly income is done through this method:
Needs: 50% of income - "This category includes all essential expenses, that is, those that are indispensable for living. Here are some examples: rent or mortgage payments, transportation expenses, car loan installment, insurance premiums, supermarket purchases, and bills for electricity, gas, water, and telecommunications".
Desires: 30% of income - "Here are all the superfluous expenses, that is, expenses that are not essential but make life more pleasant. These expenses include: meals outside the home, non-essential clothing, cultural activities, monthly subscriptions (gym and Netflix, for example), and holidays".
Savings or debt repayment: 20% of income - "This portion of the income is intended for savings (for example, to provide for retirement or children's education or create an emergency fund), investment and debt repayment."
This rule 50/30/20 first appeared in the book All Your Worth: The Ultimate Lifetime Money Plan (2005), written by American senator Elizabeth Warren and her daughter, Amelia Warren Tyagi.
Read in more detail: Managing a family budget? Get to know the 50/30/20 savings rule.
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