How Much Should I Save Each Month?
The 50/30/20 Rule
Have you ever had difficulties creating and sticking to a personal budget? Thankfully, there are several rules of thumb when it comes to personal finance. Budgeting is a practical and an informative method of determining your spending boundaries. It is also important to keep in mind for you to stay within your spending limits when creating a financial plan. A simple and effective budgeting technique that you can use is the 50/30/20 rule.
This rule of thumb is straightforward, 50% of your net income is allocated to your needs. Your daily needs should include rent or mortgage payments, utilities, groceries, transportation, etc. 30% will go towards things you want, which will include streaming and subscription services, internet and cell phone bill, memberships, shopping, and so forth. The remaining 20% should be used for paying off debt, savings, and/or investing. When budgeting, it is important to be aware of your incoming funds so that you can distribute it consciously.
For more finance tips towards applying for a mortgage please give us a call today to speak with one of our mortgage specialists at 416-621-7501.