So minimum payments on your car loan, credit cards, student loans, etc. This rule of thumb says that those expenses should comprise no more than 50% of your take-home pay.How to Bring “Shock and Awe” to Your Monthly Expenses The next 20% of your budget goes to long-term savings and extra payments on any debt you may have.
When I graduated from college, we had no money and a lot of debt.
I had about ,000 in student loans, which means we had a negative net worth.
It also includes minimum payments you need to make on your debts.
Without making them, you can suffer some serious consequences!
Dough Roller receives compensation from some companies issuing financial products, like credit cards and bank accounts, that appear on this site.
Unless a post is clearly marked "Sponsored", however, products mentioned in editorial articles and reviews are based on the author's subjective assessment of their value to readers, not compensation.
Before I started blogging about personal finance in 2007, I thought about money like most people do.
I went to college, got a job, and started spending.
I’ve seen many financial experts write about it, as well.
The bottom line is that the 50-20-30 budget has some advantages as a starting point, but, like most financial rules of thumb, it can also lead you astray.
And eventually, that just shifted for me because I’d been saving for a while.