The 50/30/20 Rule

One simple way of imposing a savings discipline on yourself is the 50/30/20 rule. It works
like this:

• 50 percent of what you earn (post-tax) goes towards your needs… housing, food and basic services.
• 30 percent of what you earn is put towards your wants… entertainment, holidays and leisure.
• And the remaining 20 percent goes towards debt repayment, retirement contributions and – of course – saving.