Save money sensibly and effectively every month with the 50-30-20 rule
Created: 04/12/2022, 09:27
By: Janine Napirca
What do you spend the most money on?
© Joseffson/Imago
What do you spend your money on the most, where is there still potential for savings?
Read here how saving works with the 50-30-20 method.
Even if it's not always easy: If at all possible, everyone should
save up a small financial cushion
.
With simple and creative savings tips, it can even be fun.
Because something can always happen - the washing machine breaks down, the car has to go to the workshop, costs that the health insurance company does not cover.
According to a report by Chip.de
, even if the income is not that high,
the 50-30-20 rule can save a little money.
You can find out how this works here.
Save money with the 50-30-20 rule - That's what it's all about
According to the report, with the 50-30-20 rule you can keep an eye on both your account balance and your expenses at all times, handle your money much more carefully and budget more consciously.
This is how
saving works with the 50-30-20 rule
:
You get an overview of your monthly available net income.
Divide the budget into three parts.
However, these three parts are not equal in size.
Of the 100% of your net salary, the first part receives 50%, the second part 30% and the third part the remaining 20%.
Tip
: Find out from your bank about a possible free second account.
You should not deposit all too much money in a checking account - because then negative interest rates can threaten.
This is what the three different parts of the 50-30-20 rule for saving money stand for:
First part 50% of net income: fixed expenses
Second part 30% of net income: free time
Third part 20% of net income: Saving
50-30-20 rule: You shouldn't spend more than half of your net income on fixed expenses
You should budget 50 percent of your net income for your
fixed costs
.
If you find that what you spend monthly on
rent, electricity, car, insurance, Internet and telephone providers, as well as groceries and
the like eats up more than half of your net income, you should definitely think about potential savings.
According to the report, it is possible to save quite a bit of money by changing tariffs for telephone, internet, electricity and insurance.
It may also be advisable to move to a cheaper apartment.
Save money with the 50-30-20 method: 30 percent for free time
According to the 50-30-20 rule, you can invest 30 percent of your net salary in pure
need satisfaction
and
leisure activities
.
You use it to
go on holiday
,
eat out
or go to the
cinema
.
Financial costs for
hobbies
or
shopping
also fall into this category.
So plan well how much you spend on your free time each month and save for the free time account if you want to treat yourself to something more expensive.
You should save 20 percent of your net income
In order to save up a financial cushion for hard times or
emergencies
, you should set aside
20 percent of your net income every month
.
On the one hand you save yourself a small fortune, on the other hand you are financially prepared if unforeseen costs arise.
Otherwise, increased ancillary costs
, additional tax payments or increases in electricity prices
can hit you just as hard as
short
-time work or
unemployment
.
Have you ever tried to save using the Nutella strategy?
(jn)
