Ever wonder how much to save each month when you get paid?
This is a very popular method of how to manage your personal money through the 50/30/20 Rule. This just means dividing up your net income (after-tax income) into the 3 categories.
This is defined as the expenses that you NEED to survive. It will include your rent/mortgage payment, utilities, cell phone bill, groceries, and anything else that you need to pay monthly — the hard costs.
This is defined as expenses that are not vital to your daily life but are nice to have. This includes dining out, entertainment, clothes/shoes, Netflix subscription.
20% Savings / Debt:
This is defined as funds for yourself, either your personal savings or paying down debt (credit card, student loans or personal debt).
An example of how this works for an annual income of $65,000. According to SalaryAfterTax.com, for my income in British Columbia, Canada, my net take home pay per month is $4,365 or $2,182.50 per paycheque every two weeks.
|50%||$1,091.25||Rent, groceries, bus pass|
|30%||$654.75||Dining out, home purchases, entertainment|
|20%||$436.50||Credit card and student loan|