The 50/30/20 rule to creating wealth.

The 50/30/20 rule is a simple and effective way to budget and save money. The principles foundation is you should spend 50% of your income on needs, 30% on wants, and 20% on savings and debt repayment. Side note, these principles are not taught in schools. I had to learn this the hard way!

There are many ways to save money using the 50/30/20 rule. Here are five practical ways to use the 50/30/20 rule to save money:

1. Automate your savings.

2. Track your spending.

3. Make a budget.

4. Live below your means.

5. Invest in yourself.

1. Automate your savings.

One of the best ways to save money is to automate your savings. Automating your savings means setting up a system where a certain percentage of your income is automatically transferred into a savings account each month. This is a great way to ensure that you are always saving money, even when you don’t feel like it. I was doing this intermittently but when I automated it, the results spoke for themselves. The balance grew a lot faster when I took myself out of the process. There will always be something you "want" vs something you "need." Take you out of the equation and the balances will grow faster.

2. Track your spending.

Another great way to save money is to track your spending. This means keeping track of where you are spending your money and how much you are spending each month. This can be a great way to identify areas where you are spending too much money and need to cut back. I was surprised to see where my money was going vs scratching my head wondering where it all went. once I knew where my money was going and on what I was spending it. I was able to make the changes and cut back on needless spending.

3. Make a budget.

Making a budget is another great way to save money. When you make a budget, you are setting limits on your spending and forcing yourself to stick to those limits. This can be a great way to ensure that you are not spending more money than you can afford. What I found that has helped us is figuring out what our monthly expenses are and then breaking them down into weekly amounts. This means that instead of looking at the whole number we broke it down into bite-sized pieces that could then be broken down into a daily number (in our case). Once we hit that number for the day we know that anything else over that number can now be added as an additional contribution to the savings or used to pay down credit card debt.

4. Live below your means.

This is one of those things that can be polarizing based on your work ethic. There is no right or wrong way to approach this step. The best choice is the one that makes sense to you. Move to a less expensive apartment. For example, a server recently moved from an "it area" in the city where they paid upwards of $38K a year to live in a nice apt. Once they downsized to a smaller efficiency in a less popular neighborhood they reduced their rent expenses from $3,166 a month to $800 a month saving $2,300 +/- that this person used to pay down debt and super-sized their savings. This one move helped this person save $10,000 in 9 months after paying down debt.

5. Invest in yourself.

By investing 20% of your after-tax income into your future self you will always have opportunities you can take advantage of. Automating the process of taking 20% out of your income and moving it to another bank. For example: finding a local credit union and setting up an account you can transfer money to or starting a whole life insurance policy that allows you a max deposit annually (varies according to the policy) and then setting up an auto transfer to this credit union account (which comes with additional benefits check with your local credit union for details) or paying a monthly premium on autopay. "Out of sight out of mind" and then let this build over time using your youth as a benefit vs a negative. Investing in yourself also means working on yourself, mentally, physically, and emotionally. We get caught up in living life or moving from one relationship to another or one job to another and being career focused that we miss out on ourselves.

These are the things I wish someone would have told me when I was in my 20s. I made out ok, but I would be in a way better financial position now had I known these things! It's never too late to start implementing this rule. It has changed our lives for the better and the results are mind-blowing. To set up your wealth creation framework and take the guesswork out of the process just drop me a comment or message me.

If you don't already have access to me you can schedule a time that works for you by using this link here:?https://bit.ly/Taxfreeincome?don't forget to share this article and newsletter with people that need to hear this message. Sometimes you can say something 100 times, but because someone else said it, it sinks in for that person who finally needed to get it.

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