What Keeps You Up At Night Series.

Have you ever looked at your bank balance and thought “where did it all go?” Today’s world of finance can have money move and exchange at a glance and if you are not watching it-it can go. Many of my clients through the years questioned where the money was going when we sat down for the first time. That is when we set down guidelines. A “budget” for guiding money use. How can I save for the future if I don’t even know how to divide it today? That is when I introduce the 50/20/30 money schematic.

The 50/20/30 budget is a straight forward formula to allocate and distribute your net income. First, you may ask “what is my net income?” My answer to you is simple- the money you receive from your income sources is your net income. The money, after taxes and benefits, that is paid to you in your paycheck. Record the amount of money you receive from all sources monthly and write it down. This is your net income.

Next, take that amount and multiply it by 0.5, 0.2, and 0.3 . 


My net income is equal to 2,500 per month

2,500.00 x 0.50= 1,250.00     (the 50%)

2,500.00 x 0.20= 500.00         (the 20%)

2,500.00 x 0.30= 750.00         (the 30%)

Check your math by adding your 3 solutions to confirm they equal the total of your net income.

You have determined your 50/20/30 budget. Let me send you the breakdown of how to subdivide your 50/20/30. Let’s see what each of these buckets cover.


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