The 50/30/20 rule is a budgeting framework designed to simplify the process
of managing personal finances. This rule divides an individual’s after-tax
income into three main categories: needs, wants, and savings. The premise
is straightforward: 50% of your income should go towards needs, 30%
towards wants, and 20% towards savings and debt repayment. By adhering
to this structure, individuals can achieve a balanced approach to spending
that promotes financial health while still allowing for enjoyment and lifestyle
choices.