A paycheck can be a powerful tool for those who know how to manage it properly – particularly in today’s state of economic uncertainty. But for those who recently secured their first full-time position post-graduation and are feeling uncertain as to where to start when it comes to maximizing their incoming income, here are a few tips for getting started.
First and foremost, it is good practice to think of your earnings as needing to fill three separate buckets. One for savings, one for spending, and one for living. This is where the 50/30/20 rule comes into play. The 50/30/20 rule is a simple and straightforward budgeting strategy that can be applied to your earnings right away. Essentially, this rule claims that half of your after-tax earnings (50%) should be allocated for needs and living expenses, while the other half should cover wants-related expenditures (30%) along with savings and investments (20%).
Although following the 50/30/20 rule sounds easy enough, keeping your savings secure and purchases purposeful does require deliberate decision-making and dedication.
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