Money Therapy<\/a>. Thompson adds that the magic of the rule comes from sticking with percentages rather than keeping tally of a strict budget. \u201cYou\u2019ll feel freer and more in control of your income instead of [feeling] tied down to track every expense.”<\/p>\nBelow, Thompson shares three tips to help you follow the 50-30-20 rule.<\/p>\n
Create an emergency fund first<\/strong>
\nSweating your student loans or other low-interest debts? Thompson says to take a deep breath and use your 50% allotment to focus on building up an emergency fund first. \u201cAim to build an emergency fund of at least $1,000 to start, so you\u2019re equipped to handle financial hiccups,\u201d she advises. \u201cThe order of operations should be to create an emergency fund, pay down as much debt as you can, and then tackle saving and investments. One common mistake I see is saving too much instead of tackling debt. Once you get out of debt, you\u2019ll be on the way to sustainable saving and financial freedom.\u201d<\/p>\nAdjust anytime you need to<\/strong>
\nGood news: the 50-30-20 rule is a guideline that you can adjust as you go. For example, you might consider switching out the percentages if you\u2019re stuck with expensive rent or a ton of payments. \u201cThe 50-30-20 rule can be altered if you are in extreme debt, such as owing more than $50,000.\u201d Thompson explains. \u201cIf this is you, try putting a higher percentage toward payments and a smaller percentage toward your wants for a while.\u201d<\/p>\nSet a savings goal and stick to it<\/strong>
\nReady to follow the 50-30-20 rule and regularly put a set percentage of your paycheck into savings? Thompson says automating it can be a huge help. \u201cYour only job is to log into your bank account, pick a date and amount to regularly transfer, and sit back and relax. Saving won\u2019t have to be something you think about when it happens automatically.\u201d<\/p>\nxx, The FabFitFun Team<\/p>\n","protected":false},"excerpt":"Knowing when to spend and when to save isn't always easy. If you're not sure ...","author":7535368,"featured_media":143895,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[573,260],"tags":[],"thumbnail_url":"https:\/\/static.fabfitfun.com\/magazine\/wp-content\/uploads\/2019\/07\/24165845\/shutterstock_243661255.jpg","thumbnail_url_middle_card":"https:\/\/static.fabfitfun.com\/magazine\/wp-content\/uploads\/2019\/07\/24165845\/shutterstock_243661255-386x200.jpg","formated_date":"July 24, 2019","category_name":"Life","category_icon":"https:\/\/d3vodd1ws13xud.cloudfront.net\/magazine\/wp-content\/uploads\/2017\/10\/10113832\/entertainment.svg","author_name":"Krista Gray","trending":false,"sponsored":false,"random_color":"#ebed89","_links":{"self":[{"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/posts\/143892"}],"collection":[{"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/users\/7535368"}],"replies":[{"embeddable":true,"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/comments?post=143892"}],"version-history":[{"count":0,"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/posts\/143892\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/media\/143895"}],"wp:attachment":[{"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/media?parent=143892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/categories?post=143892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fabfitfun.com\/magazine\/wp-json\/wp\/v2\/tags?post=143892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}