4 Rules for Saving Money(that one day might save you)
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Emi West
14 days agoMoney Saving Tips:
1.50/30/20 Rule
2.1% Rule for Impulse Buys
3. 3× Emergency Fund Rule
4. The Rule of Automation
1. 50/30/20 Budget Rule
Allocate your income to these buckets:
50% Needs
• Housing
• Food
• Transportation
• Basic Amenities
• Insurance
30% Wants
• Entertainment(Subscriptions)
• Travel
• Fashion/Gear
20% Savings
• Debt payments
• Emergency Fund
• Retirement
• Investments
2. 1% Rule for Impulse Buys
Buying impulsively is buying something without you planning to buy that item. You buy it without thinking especially when you don't actually need that item.
Use the 1% rule to control impulse Buys, if the item is over 1% of your gross income, wait 3 days. If you still want the item after three days get it.
Why this works:
You will often realize you don't actually want/need that thing.
3. 3× Emergency Fund Rule
Keep 3-6× your monthly income in an emergency fund.
When rainy day comes,you will weather the storm.
4. The Rule of Automation
Defaults are powerful because people are lazy.
So, make savings your default by automating it.
Lessons:
• Save and invest money before you ever see it.
• Create an automated money system.