![]() ![]() If you’re paying higher interest on loans than you can earn through savings, it may be wise to devote a larger portion to debt repayment. If you have student loans or are carrying a credit card balance, you’ll need to decide how to split your savings and debt repayments. If you are debt-free or your only debt is a low-interest mortgage, you may want to devote the full 20% of your net income to savings. Savings can include retirement contributions, an emergency fund, or a goal like homeownership or travel. The 50/30/20 plan prioritizes savings and debt reduction, but the breakdown of savings or debt payments will depend on your personal circumstances. You definitely need clothes, but you may opt to buy a special outfit or a more expensive brand. While you may need a cell phone, getting the newest device or paying for a premium plan may be a want. While 30% may seem extravagant, the wants category is usually doing some double duty by including any upgrades you may wish to make in your needs section. Whether it’s self-care or eating out, including some fun in your budget may make you more likely to stick to it. ![]() Wants are often called nonessentials, but these expenses allow you to personalize your budget.
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