50/30/20 Budgeting
What does the 50 represent in 50/30/20 Budgeting?
Your Needs/Expenses
How often should you review your Budget?
Every month, quarter, and/or year can help ensure your spending is on track and you’re making progress towards your goals.
The SNL video gave us sound financial advice...what was that financial advice?
Don't buy things you can't afford.
_______________ expenses are those that change in cost and occurrence. These expenses are more difficult to plan for, as they can vary depending on several factors, such as unforeseen events and discretionary spending.
Variable
What does the 30 represent in 50/30/20 Budgeting?
Your Wants/Discretionary
Building an emergency fund to cover ______ to ______ months of living expenses is important.
three to six
How would you split $5,000 using the 50//30/20 Budgeting strategy?
50%- $2,500
30%- $1,500
20%- $1,000
The value of what you own, including savings, investments, and other possessions such as your house or care. These are examples of your ________________.
Assets
What does the 20 represent in 50/30/20 Budgeting?
Your Savings
What is the easiest way to cut back on spending?
Stop eating at restaurants/fast food. Cook from home.
How do you find the balance in a budget?
Net Income - Monthly Expenses
Costs that largely remain constant, such as your monthly rent or mortgage.
Fixed Expenses
What's the main idea of 50/30/20 Budgeting?
Main idea of 50/30/20 budgeting is to divide your after tax income into three categories, needs, wants, and savings
What formula do I use to find the total expenses in a spreadsheet?
=SUM( )
The Walls Family recorded the following monthly
expenditures: January, $1,571.65; February, $1497.82; and
March $1602.39. What is their average monthly expenditure?
$1,557.29
Money saved in a bank account to cover unexpected expenses. It can help you avoid going into debt by paying for things like medical bills, car repairs, or lost income. The value should cover 3 to 6 months of expenses.
Emergency Fund
How would I calculate how much you have to spend in each section of 50/30/20 Budgeting
Equation that can be used is to multiply your take-home pay by 0.50 (for needs), 0.30 (for wants), and 0.20 (for financial goals).
50/30/20 Rule
Give an example expenditure for each category
50=Needs
30=Wants
20=Savings
You have $13,893 in your bank. How will you use 50/30/20 Budgeting?
Divide it into three categories
50% - $6946.50
30% - $4,167.90
20% - $2,778.60
20% of your net income should go into savings. This includes your 401(k), 403(b) or pensions. These are all what types of accounts?
Retirement Accounts