The '30-30-30-10' Budget: Saving 10% for Fun
Where do you go for financial advice? Your bank? Your friends? Or maybe your favorite YouTube channel?
If you look online, one idea you may have seen is called "30-30-30-10."
Did you get 100 when you added those numbers up? If so, you've passed the first test!
This is just a way to think about how you use your money.
It means you should try to put 30% of your income toward housing, 30% to food and other bills, 30% to saving, investing or paying off debt, and 10% to nice extras like entertainment and travel.
Of course, this isn't something everyone can do right away — it's a goal.
So the first step is to find out how much you're spending on these things now. Then you can try to increase or decrease your spending in each area until you get as close to 30-30-30-10 as you can.
Part of the idea is that planning to spend 10% of your income on fun things will let you spend money on them without worrying that you won't have enough for important things.
At the same time, the 30% you try to save might be used for big things in the future, like buying a house, or investing so you can retire one day.
However, whether this system is right for you will depend a lot on where you live — if housing is very expensive, it might not be possible to keep that cost down to 30% of your income.
But if you have trouble with saving, or worry that you're spending too much on things you don't really need, the 30-30-30-10 system can help you stay in your budget and save for the future.
