by Emory Alliance Credit Union
Try the 50-30-20 method and watch your savings grow
BUDGETING YOUR MONEY can be a challenge and a chore. There’s the monthly rent or mortgage payment. Then add student loans, food, a car payment and utilities. You also need some money for fun.
One relatively new rule of budgeting that has caught steam is the 50/30/20 method, which is a percentage-based budget.
This method begins by dedicating 50% of your after-tax income toward “needs” in the budget. These include things like your mortgage or rent payment, cell phone payment, cable television, utilities such as gas, electric, groceries, car payments and student loans. Any sort of insurance payment, whether it be car, health or life insurance.
Therefore, if your monthly take-home income is $2,500, under the 50/30/20 budget you would set aside $1,250 for your needs.
The next category is “wants,” which gets 30% of the income. This includes eating out and any unnecessary shopping. Hobbies are included here as well, such as going out with friends, going to the movies or a sporting event. This would also include any unnecessary subscriptions like HBO, Showtime or Netflix.
Although coffee is seen as a necessity by many people in America, your daily trip to Starbucks is considered a want as well. The final 20% of the budget goes into savings. This also includes paying off debt early such as an extra car payment or money for your emergency fund. Investing in the stock market goes into this category as well.
Contact Emory Alliance Credit Union today and we will help you get started. See emoryacu.com or call 404.329.6415 for details about membership, open to any Dekalb or Fulton county resident.