50/30/20 Budget Rule

What is 50/30/20 budget rule stands for?

• 50% on needs, 30% on wants and 20% on savings

• 50% on wants, 30% on savings and 20% on needs

• 50% on savings, 30% on needs and 20% on wants

• 50% on wants, 30% on needs and 20% on savings

What is the advantage by using this 50/30/20 budget rule?

• To help people to reach their financial goals by controlling their spending and allocate the money for their savings.

• To help individuals manage money and save for emergencies and retirement.

• To become aware of your financial habits and limit overspending and under-saving.

• All answer is correct.

Groceries, health insurance, water and electricity and house rent is an example of _________.

• wants

• savings

• needs

• wants and savings

“Everyone has their own wants that they desire but it not actually need to survive. “

Which of the following is the WANTs of an individual? (Hint : Can choose more than one answer)

• Going to vacations

• Shopping due to promotion

• Buy expensive electronic gadget like smartwatch

• Digital and streaming services like Netflix

In case unforeseen event occurs like car maintenance. How many months do an individual should have an emergency savings on hand?

• At least three months of emergency savings.

• At least six months of emergency savings.

• At least ten months of emergency savings.

• All answer is correct.

According to the 50/30/20 rule, what should 20% of your income go towards?

• needs (groceries, house rent, utilities, etc.)

• savings (invest in stock market or unit trust like ASNB)

• wants (vacations, shopping, latest electronic gadget, etc.)

Ali has divided up his income according to the 50/30/20 rule. Which part of his income should go to paying his bills and utilities?

• 50

• 30

• 20

What is a saving?

• Something we need in order to survive.

• Something we save in bank to use for emergency fund.

• Something for essential for living.

• Something we earn.

According the uses of the 50/30/20 rule of thumb for budgeting, which is the uses of “track your expenses each month, and make changes when needed, in order to stick to your spending thresholds going forward”?

• Calculate your monthly income.

• Calculate a spending threshold for each category.

• Plan your budget around these numbers.

• Follow your budget.

According the uses of the 50/30/20 rule of thumb for budgeting, why we need to calculate your monthly income?

• To see how much you should spend and allocate in each category.

• To think of these three categories as “buckets” that you can fill with monthly expenses.

• To find out how much is your after-tax income.

• To track expenses each month.