The 50/20/30 rule is one of many budgeting plans that help us getspending under control.
As housing prices rise across the country, this is becoming more difficult for many Americans.
The book was published in 2006, prior to the Great Recession and the housing bubble burst.
Since that time, income inequality has risen, and recently inflation has gotten out of control.
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According toRealtor.com, the average rent in October 2022 was $1,734/month across the top 50 metro areas.
According to theUSDA, a thrifty family of four can currently expect to pay over $967.70/month for groceries.
These two expenses alone push you well above the 50% threshold for essential living expenses.
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So if you have utilities?
Insurance or phone bills?
Personal spending is all of the stuff you like to spend money on but dont reallyneed.
And at 30% of your monthly income, that can mean a lot of freedom.
Lets say both you and your spouse pull in $200,000/year each.
That makes your monthly household income about $33,333/month.
That means 30% of your monthly budget would be $11,111.
Could you spend that much on personal spending every month?
But odds are youd really have to try.
When the 50/20/30 Budget Doesnt Work
For some, the numbers simply wont add up.
Maybe you have two jobs and still cant earn double the price of rent in your area.
Maybe your daycare options are limited.
Or maybe your student loan debt eats up most of your paycheck.
If the 50/20/30 budget isnt for you, thats OK. She is a regular contributor to The Penny Hoarder.
Former Penny Hoarder writer Tyler Omoth contributed to this report.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
