Question

Https://www.forbes.com/advisor/personal-finance/the-50-20-30-budget/#52192b3932e9

Answer 1

The 50 - 20 - 30 provides a simple and straightforward percentage based method for saving and budgeting expenses. Hence, making it easy to be replicated by newbies.

The 50 - 20 - 30 budgeting structure allots :

• 50% of take home pay for Mandatory expenses
• 20% for saving, investment and debt repayment.
• 30% for discretionary requirements.

The risk associated with the 20% recommendation include :

• The three categories are exhaustive and most people will struggle to allot tangible amount to each category.
• Low income earners will struggle to fulfill more than one of category.
• The amount saved towards retirement or saving will be very small.

Therefore, the 50-20-30 budgeting strategy is simple, however, income earned plays a huge role in the structure being realistic.

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