So I recently learned obout this budgeting practice called the 50/20/30 rule. Basically it is suggested you divvy up your take home pay in to three categories.
Fixed expenses: this is the 50%. Things like mortgage/rent, utilities, gym membership. Anything you commit to every month that pretty much stayes the same month to month.
Savings: this is the 20%. Things like having an emergency fund, saving for a big ticket item, etc.
Flexible spending: this is the 30%. Things that fluctuate month to month like groceries, fuel, things for yourself, gifts, etc.
I looked at my expenses and I’m happy to say I am under budget on fixed expenses. I am also under budget on savings. However, I am over budget on flexible spending.
I have a couple of small credit card balances. Once those are paid off in a couple months I can increase my savings to get to those goals faster.
Right now I do have an emergency fund of $1,000 and I am saving towards a trip to Europe next year and a down payment for when I have to replace my car.
Anyone out there follow this plan?