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Rewriting the 50/30/20 Rule

Hello Readers,

Many of you have undoubtedly heard the standard savings rule:

50% needs

30% wants

20% savings


I petition a rewrite: the savings percentage is just not enough.


In the words of my mother, pay yourself first. I encourage you to take a good hard look at your spending habits and see what you can cut back on because you are in control.


Scenario A

50% needs

15% wants

35% savings


Scenario B

45% needs

10% wants

45% savings


Scenario to the MOON

25% needs

15% wants

60% savings

(i wish)


Create a scenario that works for you. If you can spend less than 50% on essentials (housing, utilities, food), amazing. Stick the difference into savings. If you're spending more than 50% on essentials, it might be time to find a cheaper place (or cancel that second wine club subscription).


While your expenses are "just $5" here and "treat yourself" there, that money could be working for you in your sleep. Compound interest is the bees knees.


Happy savings,

Lady

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