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Writer's pictureSharon Dudley

Understanding the 50/30/20 Budget Rule: Budget 30% for wants.

Your wants refer to the things that you desire to have but they are not essential for your survival. They are distinct from the things that you are saving for, such as a house or a vacation, which are your long-term savings goals and are included in your budget's "savings" section. Your wants should typically make up 30% of your after-tax income.



Examples of wants include:

  • Dining out

  • Spa treatments

  • Designer Clothing

  • Club or gym memberships

  • Tickets to sporting events

  • Subscriptions to streaming services


Rewarding yourself for your hard work by spending money on things you desire is an excellent idea. Such an approach can serve as a great motivator and help you achieve your goals, which can ultimately enhance your quality of life and personal fulfillment. Moreover, your desires may change over time, so when you successfully purchase something on your list, you can add another to maintain your motivation and strive towards achieving your next goal.


Courtesy of Citizens Bank

 

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