THE RULE OF 50-30-20

The 50-30-20 rule is a financial rule that relates to how the income of individuals or households should be distributed.

According to this rule, 50% of income should be devoted to basic expenses such as rent, food, transport, and energy. The other 30% should be used for leisure activities such as entertainment, restaurants, and travel. The remaining 20% should be invested in a savings account, stocks, or other financial instruments.

Purpose of the 50-30-20 rule

This rule is not strictly applicable to all cases and can be adjusted depending on the specific needs and goals of the individual or household. However, when used effectively, it can help people achieve financial stability and satisfy both basic needs and the desire for entertainment and investment.