Have you received your salary? Remember the 50/30/20 income management method.

Start managing your income using the 50/30/20 method.

Upon receiving the monthly salary, with fixed expenses and many others that arise, managing money can be a challenge. But there are some methods that aim to help in monthly organization, such as the 50/30/20 method.

This is a method that "helps manage the family budget efficiently, simply and sustainably", according to the Ei - Educação e Informação website of Associação Mutualista Montepio, cited in Notícias ao Minuto.

"The basic principle of the 50/30/20 rule consists of distributing the net income among three categories of expenses: needs, wants, and savings (or debt repayment)."

We will see how the division of monthly income is done through this method:  

Needs: 50% of income - "This category includes all essential expenses, that is, those that are indispensable to live. Here are some examples: the rent or mortgage payment, transportation expenses, monthly car loan, insurance premiums, groceries, and bills for electricity, gas, water, and telecommunications".

Wishes: 30% of income - "Here are all the superfluous expenses, that is, expenses that are not essential, but that make life more enjoyable. These expenses include: dining out, non-essential clothing, cultural activities, monthly subscriptions (gym and Netflix, for example) and vacation".

Savings or debt repayment: 20% of income - "This portion of the income is intended for savings (for example, to secure retirement or children's education, or create an emergency fund), investment, and debt payment".

This rule 50/30/20 first appeared in the book All Your Worth: The Ultimate Lifetime Money Plan (2005), written by the American senator Elizabeth Warren and her daughter, Amelia Warren Tyagi.

Read in more detail: Manage a family budget? Know the 50/30/20 savings rule

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