How Much of Your Paycheck Should You Save?

Published on March 15th, 2018

I think that we can all agree that when payday rolls around, we are super excited for that long-awaited money to hit our bank account. Regardless of if you need a payday cash loan or you’re sitting on a pile of money, saving at least a portion of your income is always a good idea.

50/20/30 Rule

Consider the bottom line of your monthly budget and then divide it into three different parts. As a general rule of thumb, 50 percent of this budget should be allocated towards essentials such as rent and food. An additional 30 percent of your monthly budget should go towards lifestyle-related choices such as extra television channels, nights out with your friends or other related costs. Finally, at least 20 percent should be allocated toward your financial priorities such as debt or loan payments as well as your general savings accounts.

How to Divide the 20 Percent

As mentioned above, 20 percent of your monthly budget should go toward your financial priorities, but it can be hard to prioritize what funds get how much money. If you have payments with high interest, of course, try to pay those off first. If an emergency situation pops up, this should also be attended to as well.

Of course, everyone has different financial situations, but sticking to this 50/20/30 rule as much as possible will serve you well in the long run. If you’re in a bind, our payday cash loans can help! Contact Short Term Loans today if you’re in need of money fast or have questions about how to best handle your finances.

Source: Learnvest

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