Is budgeting stressful to you? Do you feel overwhelmed? We understand that sometimes when it feels like too much of a challenge, it is easier to just give up. Farmers Bank is here to help. We have outlined important tips including the 50.20.30 budget rule. It’s part of a simple plan to help you reach your financial goals.
When you use the 50-20-30 budget rule, you should spend up to 50% of your net income on needs–things you must have or cannot live without. These include rent or mortgage payments, car payments, groceries, insurance, health care and utilities. Half of your net income should be all that is required to cover your needs and obligations.
Next, try to allocate 20% of your net income to savings, debt payments and investments. A best practice is to have at least three months of emergency savings on hand in case of job loss or another unforeseen event. After that, focus on retirement, paying off debt and meeting other future financial goals.
Allowing yourself to check some of your “wants” off of your bucket list is also important. The final 30% of your net income should go toward these wants. A dinner out followed by a movie, a new outfit, or a vacation to a dream destination are all possible when you budget wisely.
While budgeting can seem impossible at times, the 50.20.30 budget rule can keep you on track to ensure that you set yourself up for financial success. Farmers Bank has many different products to provide every individual customer options for their budgeting needs. Please contact us for details.
Blogpost written by:
BSA/Security/Information Security Specialist
Watch this fun video about the 50-20-30 Budgeting Rule