"Ang tagal naman ng sweldo!", "Maliit kasi sweldo ko!", "Puro kayo gastos!", "Hay nako, kapos na naman!"
Sound familiar? They say it's human nature to complain. They may be right but no matter how small or big your salary is, if you lack discipline, no amount of salary will ever be enough. Elizabeth Warren, a US Senator and professor at Harvard University specializing in bankrupcy law, created what is known as the 50/30/20 Rule. Simply put, the rule advises you to spend your monthly income in 3 categories:
- 50% on things you need
- 30% on things you want
- 20% on savings and investments
The beauty of this rule is that it's both simple enough to follow yet powerful enough to help you achieve financial stability. It helps you handle unexpected expenses while at the same time prepare you for the future. If you're not sure how to start your budgeting strategy, try this. You can always adjust the percentages that's more suited to your current situation but it's a good place to start. It allows you to balance between your obligations, your long term goals, as well as your splurges. And at least with a rule like this, you know where you are over-spending.
Of course if all else fail, there's always HPPECC. :-)
