It’s the end of the month, and you just received your salary, but there’s no smile on your face because all you can think of are your back-breaking expenses. You’ve not even started the new month, but your salary has finished and sapa is flirting with you already. This thing has happened to the best of us, even me that is about to give you advice. Have you heard about the 50/30/20 budgeting rule?
It is a way you can stop the trenches from making space for you in its community. It looks like a date format, right? Anyway, this rule is going to change your life for the better. Are you ready to receive my wealth of wisdom? Let me break it down for you.
What Exactly Is the 50/30/20 Budgeting Rule?
This is a super simple rule that pays attention to three things; your needs, wants, and goals. If you add 50, 30, and 20 together, you get a total of 100, right? These individual numbers are percentages of your income.
- 50% of your income should take care of your needs
- 30% of your income should take care of your wants, and
- 20% of your income should be used to further your financial goals
My favorite thing about this rule is that it encourages you to take care of yourself while preparing you for the future of a soft life.
What Are Your Needs?
Your needs are basic expenses that play a crucial role in living and working. Your needs can include things like:
- Utility Bills
What Are Your Wants?
Your wants are things you can live without, but wouldn’t mind spending money on. They could include:
- A trip to Dubai
- Getting your nails done
- Netflix subscription
- A dress for your next date
- Scented candles and so much more.
Pro Tip: You can eat your cake and have it when you use Zilla to fund your enjoyment. You get to cater to as many wants as you like and spread the payments across weeks depending on the plan you choose.
What Are Your Financial Goals?
Financial goals look different for everyone. For one person, it could be to save their first million by the end of the year, for another, it could be to have enough money to acquire two plots of land.
How to Use This Rule
Let’s imagine you earn 300k monthly and you want to follow this rule, here’s how it’ll work
- Needs: 50% of 300,000 naira is 150,000.
- Wants: 30% of 300,000 naira is 90,000
- Financial Goals: 20% of 300,000 Naira is 60,000
Sapaphobia is a real thing, following this budgeting rule consistently will help you avoid the trenches and help you channel the enjoyment minister that you truly are.