building a budget using the 50/30/20 ruleincomeexpensesfixed expensesvariable expenseswants needsgoals
Log in 🥠Lil Mango a year agoPosted a year ago. Direct link to 🥠Lil Mango's post “If someone runs a small b...” If someone runs a small business as their main income and say they make $2,000 one month, $3,000 the next month, and $400 the third month, how would you calculate your income? • (17 votes) Elvira (Elly) a year agoPosted a year ago. Direct link to Elvira (Elly)'s post “There are a few different...” There are a few different ways you could approach budgeting with an inconsistent income like this. Here are three possibilities: (49 votes) Ddub 10 months agoPosted 10 months ago. Direct link to Ddub's post “I'm thirteen but still ma...” I'm thirteen but still made a budget just like Saal's. • (23 votes) Kate Ford 9 months agoPosted 9 months ago. Direct link to Kate Ford's post “You are so wise! One thin...” You are so wise! One thing I wish I would have done that is so simple: save a percentage of every dollar that comes into your hands. Whether it is the 20% recommended here or just 10%, you will always be very happy you did this. (18 votes) Laurel Naone 9 months agoPosted 9 months ago. Direct link to Laurel Naone's post “Hypothetically, is it oka...” Hypothetically, is it okay to swap the wants and savings categories so that I am saving 30% of my monthly income and using 20% for wants? • (16 votes) David Alexander 9 months agoPosted 9 months ago. Direct link to David Alexander's post “No problem. Do that and p...” No problem. Do that and prosper! Of course, you might find yourself a bit pinched when it comes time to take a vacation to Las Vegas. (11 votes) chilling a year agoPosted a year ago. Direct link to chilling's post “how can i use extra money...” how can i use extra money or spend them? • (2 votes) David Alexander a year agoPosted a year ago. Direct link to David Alexander's post “You can use extra money t...” You can use extra money to support victims of domestic violence in your community by contributing it to a shelter for abused women and children. You can spend extra money to purchase clean socks and underwear for homeless people. (19 votes) C4LOwenZ 9 months agoPosted 9 months ago. Direct link to C4LOwenZ's post “The cost of living, espec...” The cost of living, especially for young adults are quite high. Additionally, there will be student loans once I get to college. By then, credits and loans and such will be quite high and I don't think I'll be able to follow the 50-30-20 rule. What will I do then? • (5 votes) David Lee Madison 7 months agoPosted 7 months ago. Direct link to David Lee Madison's post “Don't pay for college in ...” Don't pay for college in the first place. Go into business for yourself by auditing classes, learning online, paying SOME money for very TARGETED disciplines that you want to learn. Everyone seems to have a degree; and you'll just be competing with everyone else who is also hugely in debt. If you absolutely feel you want to go to college, learn to write, and create small videos on a YouTube channel. Get a bunch of 'friends' on Facebook or other social media platforms, and then ask for donations after going onto an online crowdfunding site. A quarter from a million people is a quarter million dollars and most won't think twice about that if they feel it's for a really good cause. Again, this is why I stress teaching yourself sales and marketing. With that understanding and skillset, the world is pretty much your oyster. Let's stop all this non-sense about solving your problems by scrimping and saving for years on end and going into debt, taking classes you'll never use or want; and rather, learn the art of true investment... such as what I just outlined. The advice being given is shameful here... it's going to leave most of the people here in financial bondage! So, let's think of a creative way to get out of this mess! (7 votes) puzzler223 8 months agoPosted 8 months ago. Direct link to puzzler223's post “I disagree with the 50/30...” I disagree with the 50/30/20 rule, if budgeted you could probably save at least half of your after-tax income. Try and cut out as many need as you can, start with eating out and cook your food at home, and not just opening up a ready-made bowl of mac 'n cheese, actually make something from scratch. Just a suggestion. • (4 votes) David Alexander 8 months agoPosted 8 months ago. Direct link to David Alexander's post “Cooking at home is not th...” Cooking at home is not the problem for poor people. Things like rent, health insurance and the high cost of keeping an automobile on the road eat up the available funds. As you work out a budget that fits into your apparent 30/20/50 scheme, how much are you, yourself, paying for rent? How much are you, yourself, laying out for health insurance? What portion of your personal after-tax income is being spent keeping your car on the road? These real expenses will help you see if your scheme is practical. (12 votes) Hannan,Cullin 4 months agoPosted 4 months ago. Direct link to Hannan,Cullin's post “If I don't have a need do...” If I don't have a need do I put that towards wants or saving? • (4 votes) David Alexander 4 months agoPosted 4 months ago. Direct link to David Alexander's post “Dear Hannan,I'm going to...” Dear Hannan, This lesson is about budgeting. Why not do this: Make a game of it. Use "Monopoly money", assign yourself a salary, and some expenses. Use envelopes to divide up the money for "fixed expenses" that happen monthly, quarterly and annually. See how it feels. (7 votes) Sardik Vafoyev 8 months agoPosted 8 months ago. Direct link to Sardik Vafoyev's post “could you give us the for...” could you give us the forlmula for calculating on Excel? • (7 votes) KeetonD 2 months agoPosted 2 months ago. Direct link to KeetonD's post “by saving money” by saving money (1 vote) Harley N a year agoPosted a year ago. Direct link to Harley N's post “I feel like given how the...” I feel like given how the needs section already feels like the budget is very very spread out with not a lot of wiggle room, cutting back just doesn't feel like the best idea. Yes it would technically go against the 50/30/20 rule, but I feel like cutting back on wants even more may have been a better idea to allow for the savings target. Even if it means having a weird ugly 59/21/20 rule instead. Maybe I'm missing the point but it feels easier to save on stuff like "eating out" (don't get sodas or just go to cheaper restaurants) than your car. • (4 votes) David Alexander a year agoPosted a year ago. Direct link to David Alexander's post “The first and best thing ...” The first and best thing I can advise is that you dump the car. That was the big money pit into which large chunks of my resources went from the time I was 16 until I was 24. Had I learned to do without that junk, I'd have been thousands of dollars ahead at a young age, and tens of thousands of dollars ahead now that I'm an old guy. Ditch. The. Car. (5 votes) BLEB 3 months agoPosted 3 months ago. Direct link to BLEB's post “I think that the 50/30/20...” I think that the 50/30/20 rule for budgeting depends on the type of lifestyle you have. For instance, if you have a family and plan on paying for your child's college education or future expenses, it's advisable to put 30% of your income towards your savings, instead of the suggested 20%. Even if your child is not planning to go to college, having some savings set aside for future expenses is always a good idea. While it's important to cater to your family's wants, it's crucial to prioritize your savings. On the other hand, if you have no family responsibilities and no dependents, savings may not be as important to you as it is to someone with kids. However, it's still wise to save some money here and there, especially if you plan on having kids in the future or would like to have a financial cushion in case of any unforeseen circ*mstances. Does the 50/30/20 rule have a definitive way that it should be applied? Or does it ultimately depend on your lifestyle and financial goals? • (5 votes) KeetonD 2 months agoPosted 2 months ago. Direct link to KeetonD's post “money saving” money saving (1 vote)Want to join the conversation?
1. You could average your monthly income over a certain period of time to arrive at a monthly figure to budget around. For example, in the three-month example given, your average monthly income would be $1,800. You could budget around this figure, being careful to save extra money in the months where you make more, in order to cover expenses in the months where you make less.
2. You could take the lowest monthly income you tend to receive and use that as your baseline for budgeting. In the example given, you would budget around making $400 per month. This would be a conservative approach, and you would need to save the extra income in the months where you make more, in order to cover expenses in the leaner months.
3. You could create a flexible budget where your expenses adjust depending on your income each month. This might mean that in months where you make more, you can spend more on discretionary expenses or invest in your business, while in months where you make less, you cut back on these types of expenses in order to make ends meet.
I'm going to assume that you still live in your parents' home, where your shelter, food, transportation and entertainment are already taken care of. In a situation like that, saving is just a good thing to learn, but it doesn't really make a difference.
