How 1 Super-Simple System Can Slay Your Money Woes
There's a reason so few people create and maintain budgets: It's boring. But if that's what's been holding you back, there is a budgeting approach you should consider that requires little work yet still delivers all of the usual benefits.
The 50/20/30 budgeting system divides your income into three primary spending categories. First, up to 50% of your income goes to essential expenses (e.g., rent/mortgage payments, groceries, and utilities). Next, up to 20% of your income goes to financial goals (e.g., paying down debt, saving, and investing). And lastly, the remaining 30% of your income goes to discretionary spending (e.g., restaurants, movies, and hobbies).
The trickiest part of the system can be figuring out what goes into which categories. You'll likely need to do some customizing based on your situation. For example, take internet access. I have a home office and do a lot of work online from it, so for me, internet access is a necessity and would fall into the essential expense category. For someone else, it might be strictly a "fun" purchase and would fall into the discretionary expense category.
Source: Fool.com
