Question

Your younger brother just heard about the 50-20-30 savings rule of thumb and asks you what it is. What do you tell him?

Answer 1

The 50-20-30 savings rule is a simple plan that helps people on managing their money.

It states that over your total after-tax earnings, 50% should be spent on your needs and obligations. 20% should be spent on savings and debt payments, and 30% on whatever else you like.