50/30/20

Front

What is the 50/30/20 budget rule?

Back

The 50/30/20 budget rule is a simple budgeting guideline that suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings.

Front

What are 'Needs' in the context of budgeting?

Back

'Needs' are essential expenses that are necessary for survival and basic functioning, such as food, housing, and healthcare.

Front

What are 'Wants' in the context of budgeting?

Back

'Wants' are non-essential expenses that enhance your lifestyle but are not necessary for survival, such as dining out, entertainment, and luxury items.

Front

What is an example of a fixed expense?

Back

An example of a fixed expense is mortgage or rent, which remains constant each month.

Front

What is an example of a variable expense?

Back

An example of a variable expense is groceries, which can fluctuate based on consumption.

Front

How much should you allocate to 'Wants' if you have $1000 after taxes?

Back

According to the 50/30/20 rule, you should allocate $300 to 'Wants'.

Front

What is the purpose of budgeting?

Back

The purpose of budgeting is to manage your finances effectively, ensuring you can cover your needs, enjoy some wants, and save for the future.

Front

What is a bill?

Back

A bill is a statement of money owed for goods or services received, such as an electric bill.

Front

What is the difference between a need and a want?

Back

A need is something essential for survival, while a want is something that enhances quality of life but is not essential.

Front

What percentage of your income should go to savings according to the 50/30/20 rule?

Back

According to the 50/30/20 rule, 20% of your income should go to savings.