The 50-30-20 rule is intended to teach you how to manage money

People don't talk about money? Pfft, we see it differently. After all, money is an important part of our lives that determines what we can and cannot afford., ruining friendships, even splitting entire families. That's precisely why it's so important to have oneLearned how to handle your own finances well. Not just for others, but also. Otherwise the money issue can quickly become a mental stress test. To prevent this from happening:50-30-20 Rulelook at it, internalize it, become smarter.

Managing money is a challenge for many people, resulting from a combination of a lack of financial education, psychological factors and social pressure. Many have never formally learned how to budget, save, or invest effectively. That's why they don't know how to handle money properly. In addition, emotions and the desire to improve one's standard of living or keep up with others often lead to impulsive purchasing decisions. Advertising and social pressure aren't exactly conducive to our spending habits either, and let's be honest: the financial market isn't exactly easy to understand either. Consciously dealing with finances is quite complicated, who wants to do that? Nevertheless, it is important to act financially responsibly in order to secure your own existence and not fall down the abyss of debt. A fairly simple and easy to understand method is the 50-30-20 rule. It doesn’t require any business chatter and can be tailored to any individual situation.

If you click through the Internet these days, you can't get out without getting one or two financial tips thrown around your screen. People and self-proclaimed experts who don't necessarily look like they have their finances under control want to tell you the smartest way to invest your money and what you should do with it. You read about it everywhereand investment strategies, from ETF, NFT and WTF. Do you need that? Definitely not. As long as you can keep your money together yourself, you don't have to be unsettled by such dubious tips. And people who have no idea about finances shouldn't do that either. As a first rule of thumb, we would recommend that no more money goes out than comes in each month. It sounds banal, but it is a helpful learning and an important step in healthy money management. Then it's about prioritizing spending - and the crucial 50-30-20 rule.

You usually have a certain amount of income and a certain number of expenses each month. The only question is which amounts you spend on what so that you don't exceed your target at the end of the month and divide your money in the best possible way. The 50-30-20 rule is not a universal rule according to which you have to base all your expenses, people and living circumstances are simply too different for that. But at least it gives some kind of help on how to cleverly divide up certain percentages of your income in order to finally get your finances under control. Various economists are also convinced of this. The budgeting strategy makes the following suggestion:

of monthly expenses should be reserved for fixed costs. This includes (if possible) the rent or the, insurance, transportation costs and food expenses. These are costs that are due every month and are always of a similar value.

According to the 50-30-20 rule, the monthly expenses should be spent on private matters. This includes spending on leisure activities such asas well as restaurant visits and vacations. In other words, all costs that cannot be sorted under the fixed costs tab and are intended for fun. These are variable costs.

of available income should be set aside every month to save money and build up a financial cushion. The best ones are the appropriate onesor transferred directly to a separate account so that you can keep track of everything. Unforeseen costs can then be covered in an emergency.

The 50-30-20 rule helps you reserve your budget for the right purposes. The best thing to do is to make a spending plan and calculate what amount is available each month for what purpose. According to the budgeting strategy, 20 percent of your monthly income should be saved and invested. But before you directly transfer 20 percent of your net income to an account that you may not be able to access again for a few years, experts recommend building up a so-called emergency fund. This emergency fund consists of at least three to six net monthly salaries, which you can use to quickly and easily pay off emergency expenses. Only when this amount has been saved can you use the remaining money from the 20 percent set aside each monthput. Of course, the 50-30-20 rule won't suddenly save all your financial problems or calm your worries. But it at least offers long-term help so that it doesn't have to come to that point in the first place.