It is true that money is not a solution to all problems, but there is no doubt that lack of money is the basis for many of life's stresses.
The income-saving technique known as 50-30-20 can help you achieve some of your major goals in life. Take the time to write down all the style requirements and make them achievable by setting deadlines for achieving them (be it five months, five years, or even thirty).
We often have short-term financial goals — for example, paying off your debts, or having enough money in your account for a fun vacation. You'll also find that you have medium-term goals (maybe buying a new car, or making the down payment on your first home)
Other times we have long-term goals (such as securing your children's college tuition or securing your retirement with a sufficient amount).
After you write down your deadlines, you will notice something magical happening; It is when your dreams begin to transform and become a reality on the ground. Write your goals down on a piece of paper and keep them somewhere to stay motivated.
When you set a date for your dream, it will become a target.
When you divide the goal into phases, it will become a plan.
And when you put your plan into action the dream will turn into reality.
What is the savig equation: 20/30/50
If you are having trouble distributing your salary and following the monthly budget, you should look for a way to help you manage your financial affairs in proportion to the monthly salary.
One of those methods is to follow the “50-30-20” rule for dividing the monthly salary, which is characterized by its effectiveness in managing the budget, and providing a surplus that contributes to increasing savings and reducing financial pressures.
The 50-30-20 income saving technique states that you divide your monthly salary. That is, the income is divided into three parts, which are allocated to:
- basic expenses
- variable expenses
- Savings and investment plans.
This is in accordance with the financial guidelines provided by the Saudi Arabian Monetary Agency on its website.
The 50-30-20 rule helps individuals manage their monthly budget by setting an actual framework for financial commitments and monthly expenses.
In addition, allocating part of the salary per month helps achieve our future financial goals, whether it is savings or investments, without a deficit budget, or an increase in the volume of monthly expenses more.
What does the 20-30-50 equation work?
This simple equation is a popular method with which you can Divide the monthly income allocations into three main categories:
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50%
For Needs
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|---|
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Living expenses, such as rent, groceries, school fees, and utility
bills. You can also include a minimum debt payment (on a credit card
or car financing, for example) under this category.
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30%
Secandry Things
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A new smartphone or a new handbag, a romantic dinner out, tickets
to the Dubai Opera... You deserve to enjoy these little extras from
time to time as long as you can afford them.
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20%
Savings
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| At least 20% of your monthly income should be allocated to savings and investment. This category might include further debt reduction (more than your minimum payments due), money toward your emergency fund or a contribution to an investment fund. |