The Golden Rule of 50/30/20
At the end of the month, you wait for a payday like mercy and wonder all of the newly acquired money you have to pay. Yes, this is the situation of a huge number of families throughout the Czech Republic. The problem is that they often cannot get out of this vicious circle for several years. So how should they handle the money so that they do not have to suffer at the end of the month and pray for another payday. There are so-called 50/30/20 rules. These numbers, separated by slashes, represent the percentage of salary.
) 50 %
Up to 50% of the salary will be what you need to pay. For example, part of rent, food, water, electricity, etc.
) 30 %
30 percent is part of the salary that a person should spend on entertainment. Someone uses this part for travel, lunch in a restaurant or beer in a pub.
) 20 %
You need to save 20% of your salary. From the money saved, he can pay for unexpected expenses, such as a broken washing machine or the need for a new boiler. This 20% can also be used to pay off various debts, etc.
At the beginning of saving, we need to clarify how much money we actually want to save. What is enough for us and financial background. For everyone, this boundary moves somewhere else. It also depends on the amount of property and rent. The money reserve is to enable us to secure these things in difficult cases.
But what if a person has problems paying off debts, can not afford to maintain 20% of his salary, and often does not have 30%. In this case, we fall into a vicious circle, from which the person in question must come out with constant changes. For example, change the rent or change the job. By changing jobs, he can achieve a better salary and change his life for the better.
This advice seems silly to some. But when you really start to use and experience this rule, you will find it a useful tool.