Savings can be grown with fertilizer formula 50-30-20. All riches begin with planning. Making financial planning is as important as increasing income. Because despite having a lot of income, but if the management is not correct The money you have will be gone without knowing.
What is 50-30-20 Budget?
"The money plan" is hard to just listen to. But if changing a few words to 'Fertilizer, planting trees, savings', just listening to the name is fun. There are many fertilizers to plant, the savings formula, depending on each person. But if anyone still does not know which fertilizer formula is good So try to start growing with fertilizer formula 50-30-20 (The 50-30-20 budget).
The origin of this formula of financial fertilizers arose because traditional financial statements were extremely complex and complex, prompting Elizabeth Warren to come up with a way to create simple and practical financial statements. Financial statements, the Elizabeth Warren style, are divided into three parts:
The basic rule is to divide up after-tax income and allocate it to spend: 50% on needs, 30% on wants, and socking away 20% to savings.
50 - for Living or money to spend necessary
This is money (after taxes) to spend on your monthly necessities. Which is the money you have to pay every month, do not forget it, for example Rent or payment of various debts, water, electricity or living expenses, including travel and medical expenses.
30 - for Fun or money to spend as you like.
Committing to saving money is a good thing. But being too strict with ourselves can also make it easy for us to fail. The money we spend is what we like, so it is the portion that we spend for personal relaxation, such as going out, buying concert tickets, or going on a date with your boyfriend. Of course, everyone will like this money.
20 - for Financial Goal or money for long-term savings
Saving money has a goal. This portion of savings is savings for a specific destination. Some people save this money for retirement. Or save this money as an emergency reserve for the future And many people save this money as investment money to make their savings grow even more.
Remember that every financial plan should be customized. This fertilizer formula is only one formula. May be able to modify over time But if anyone who wants to start planting 'savings' and then use this fertilizer formula and take care of the savings tree regularly. Your savings will result in wealth for you.