ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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50% needs, 30% wants, 20% savings
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50% budget, 30% needs, 20% wants
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50% saving, 30% needs, 20% wants
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$50 needs, $30 wants, $20 savings
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Detailed explanation-1: -The rule says that 50% of your after-tax income must be spent on needs and obligations that you have to meet, such as rent and utilities. The remaining half should then be split between 20% savings and debt repayment and 30% to your wants and entertainment.
Detailed explanation-2: -The rule is very simple in practice. It asks you to break your in-hand income into three parts. 50% of the income goes to needs, 30% for wants and 20% to savings and investing. In this way, you will have set buckets for everything and operate within the permissible amount for each bucket.
Detailed explanation-3: -Because the 50-20-30 rule is a simple budgeting concept, it can be a good choice for people who are new to creating a personal budget. The percentages can be easy to calculate or plug into any spreadsheets you already use for your financial information.
Detailed explanation-4: -One rule to live by when budgeting is to use 50 percent of your income on needs, 30 percent on wants, and 20 percent on savings goals.