How to Create A 50-30-20 Budget
Creating a 50-30-20 budget is an effective way to live within your means and also put aside money to pay down debt, or in the case of an emergency. The 50-30-20 budget has become very popular because of the effectiveness of this budgeting system. This article will outline how to create a 50-30-20 budget.
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Instructions
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The first step to creating a 50-30-20 budget is to allocate 50% of your monthly income to your must have items in life. This is a roof over your head, food, clothing, water, medical care etc. You need to make sure you are allocating only must have items to this part of the budget. Must haves are not a new shirt, a cable bill, gym membership, or anything other than absolute must haves to survive. Once you have done this you have completed the 50 portion of the budget.
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The second step to creating a 50-30-20 budget is to allocate is the 30 portion. The 30 portion is the 30% of your monthly income that you can spend on what you want. This list can include your gym membership, cable bill, eating out, a new pair of shoes etc.
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The third step to creating a 50-30-20 budget is the 20 portion. This is 20% of your monthly income that you are going to set aside in case of an emergency, or to pay down any debts that you owe. You can use this money in the event of a medical emergency, or in case you ever lose your job and need to have money available.
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Tips & Warnings
Use the guidelines in this article to create a 50-30-20 budget.
