The 50-30-20 rule is an idea that has been around for a long time. Some national magazines and finance advisors made it popular a few years back. It is a useful idea for analyzing spending and bringing a basic sense of order to personal finances. The basic idea is that when considering your after-tax income, 50 percent should cover your necessities, 30 percent can go to spending, and 20 percent can go to savings, retirement, and paying debts.
The things you must pay for to maintain your basic needs fall under the first category. Apartment rent for a month-to-month rental or long-term lease is a necessary expense. Food is also a necessity. If you are required to pay for heating, cooling, and water, then your utilities are also included in the 50 percent figure.
If your apartment rental comes with utilities included, then your budget is simpler and more predictable than if the utility costs vary by the month or season. The wild swings of winter heating or summer cooling can pierce your budget and weaken your ability to save and pay bills. While budgeting, be sure to plan for changes and unexpected events that may occur throughout the year.
You must save to protect against the unexpected and to prepare for the expected time when you can retire. The 20-percent group also includes paying down long-term debts. Today, when so many young people have high levels of student loans, debt can crowd savings, which are important to personal financial security.
Life should be as full of fun and pleasurable things as possible. For most of us, that involves spending choices. Going out to dinners, attending the theater, and entertaining are great ways to enjoy life. You can reserve up to 30 percent of your money for these and other activities. Guilt-free spending requires some discipline and planning, though.
You can increase the funds available for fun and savings by managing costs. Finding an apartment with utilities included can be a budget saver. A month-to-month rental may also allow you to put aside money for other needs and wants. Remember, saving now can lead to much more fun in the future.
Contact our apartment complex in Quincy, IL, if you’re looking for cost-saving housing options. At New Tremont Apartments, we offer many specials that can help you stick to your budget.
