The 411 On The 50-30-20 Rule
"Deprivation".
"Restrictions".
"Boring".
All of these words constantly ran through my mind when I first tried to get my finances in order and implement a budget. I had so many failed attempts because, for one, I was making my budgets super unrealistic and, two, I cringed at just the thought of having to even be on a budget. I just didn't get why I needed one. So quite naturally, I was unable to make it a consistent habit.
Fast forward a few years later, I started to grasp the concept of a budget much better. I'd attribute that to mindset shifts as well. I realized that a budget was simply just a spending plan and that I didn't have to strip all of the things I loved and enjoyed doing in order to be successful with budgeting.
You can still live your best life while on a budget.
I didn't have to give up brunch with my girls or have to compromise my style. Once I implemented budgeting into my life, I was actually able to do MORE of the things that I enjoyed simply because I was much more responsible with my coins and knew where everything was going. I also cut out things from my life/expenses that did not serve me any longer and that I didn't value.
That's why I can appreciate the 50/30/20 rule when it comes to budgeting. It's simple, realistic, and doesn't deprive you of those things that you love while taking care of business. Let me break it down for you.
The 50/30/20 rule is simply this:
- 50% of your income goes to your needs
- 30% of your income goes to your wants
- 20% of your income goes to your savings and other goals
See, simple right?
Here's how you set a solid foundation and get started with implementing this rule into your lifestyle.
Analyze spending habits
First, it's imperative that you analyze your spending habits prior to establishing this budgeting rule.
Most people spend more money than they think they are actually spending. Additionally, they don't really know where their money is going. You need to analyze your spending habits in order to get down to the nitty gritty. Taking time to really dig into your accounts will help you when deciding where you want to allocate your coins with the 50/30/20 rule. It's super hard to get your financial life in order if you don't know where your money is going.
Make sure you are taking a close look into the discretionary spending that you are doing. These expenses are those that vary from month to month, to include:
- Eating Out
- Clothing
- Groceries
- Going Out/Entertainment
- Transportation
Ask yourself, "Am I doing the most with my spending, or nah?" Keep it 100!
Determine your actual needs (50%) vs. your wants (30%)
Additionally, many people have trouble sticking to a budget because they find it hard to determine the difference between true needs and wants.
Needs are items that you must have for basic survival/daily living. For example, food, housing, clothing, transportation, insurance, etc are all needs.
Wants are items you desire, but can live without. For example, travel, entertainment, hobbies, eating out, memberships, etc are all wants.
To determine if an item is a need or a want, picture yourself living without it. What consequences would occur if you didn't have that item in your life? Would those consequences have a significant impact or would you just miss the item? Being honest about the difference between a need and a want is a critical step towards smart budgeting.
Using the rule of 50% towards needs and 30% towards wants, actually allocate your income accordingly.
Identify savings and other financial goals (20%)
Once you've gotten clarity on where you're spending your money and identified your needs and wants, you then need to figure out what you want to accomplish with the remaining 20% of your income.
Here's a few questions to get you going:
- How much do you want to contribute to retirement?
- How much do you want to contribute to your emergency fund?
- Do you have any debts you want to pay off? How much extra do you want to contribute to reach those goals?
- Do you have any other investment goals? How much do you want to invest?
This is the roadmap for the 50/30/20 rule. Here's a quick example:
MONTHLY TAKE HOME PAY: $3,200
NEEDS: $1600
Rent $1,000
Utilities $150
Transportation $100
Food $200
Insurance $150
WANTS: $960
Travel $400
Eating Out $150
Nails $50
Apple Music $10
Netflix $10
Gym $10
Hair $130
Sneakers $200
SAVINGS/GOALS: $640
Emergency Fund $90
401K $150
Debt Payoff $400
The most important step comes with the implementation and execution.
Once you determine how much and where, it's time to actually put it to use and see how it works for you. The fact that it's easy to use and to get started with regardless of your income is an advantage of using this method. Additionally, you'll be able to shape bomb money management habits without having to do too much while simultaneously saving for your future. I also love how it's super flexible and you can adjust everything to fit your lifestyle and income increases over time.
One con of this method is that it may not be realistic for those whose expenses are over 50% of their income. If that's the case, you can determine if there's anything you can cut out or bring in additional cash if needed.
This framework should allow you to get a better grasp on your money management and grow your savings in the process. Just like with everything else, you have to find what works best for you and stick with it in order to see results.
Do you subscribe to the 50/30/20 rule when you budget? What are some of your tips for effective budgeting?
Featured image by StellrWeb on Unsplash
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- Why I Hate the 50/20/30 Budget | Club Thrifty ›
- Is the 50/20/30 Rule the Best Way to Budget Your Money? ›
- What is the 50/20/30 budget rule? | Investopedia ›
- The Ultimate Guide to the 50/30/20 Budget (Updated 2018) - Chime ... ›
- Budgeting your money using the "50/20/30" rule ›
- 10 Good Financial Rules of Thumb ›
- Free Budget Calculator - NerdWallet ›
- The 50/20/30 Rule for Minimalist Budgeting | MintLife Blog ›
- New To Budgeting? Why You Should Try The 50-20-30 Rule ›
- The 50/30/20 Budgeting Rule—How It Works ›
Kristin Sutton (aka the Money Therapist) is a personal finance and lifestyle blogger/coach over at DebtFreeBlackGirl.com that empowers young women to take control of their finances by changing the way they think about money. As a licensed therapist, her daily mission is to uncover and eliminate the mental roadblocks that hinder people from living the life of their dreams. You can find her on all things social: @DebtFreeBlkGrl
ItGirl 100 Honors Black Women Who Create Culture & Put On For Their Cities
As they say, create the change you want to see in this world, besties. That’s why xoNecole linked up with Hyundai for the inaugural ItGirl 100 List, a celebration of 100 Genzennial women who aren’t afraid to pull up their own seats to the table. Across regions and industries, these women embody the essence of discovering self-value through purpose, honey! They're fierce, they’re ultra-creative, and we know they make their cities proud.
VIEW THE FULL ITGIRL 100 LIST HERE.
Don’t forget to also check out the ItGirl Directory, featuring 50 Black-woman-owned marketing and branding agencies, photographers and videographers, publicists, and more.
THE ITGIRL MEMO
I. An ItGirl puts on for her city and masters her self-worth through purpose.
II. An ItGirl celebrates all the things that make her unique.
III. An ItGirl empowers others to become the best versions of themselves.
IV. An ItGirl leads by example, inspiring others through her actions and integrity.
V. An ItGirl paves the way for authenticity and diversity in all aspects of life.
VI. An ItGirl uses the power of her voice to advocate for positive change in the world.
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I Tried Beyoncé's Haircare Line CÉCRED & Here's My Honest Review
Beyoncé is snatching our wallets yet again with her latest business venture CÉCRED. In 2023, the Texas native hinted at a potential haircare line when she posted this photo causing fans to speculate that her next project would be focused on her famous tresses - they were right. Her haircare line Cécred launched on February 20 with her first drop called The Foundation Collection which focuses on haircare first, and I can only assume that a style product line for colored-treated hair will likely follow since Beyoncé is known for slaying various shades of blonde.
As a super fan since the early 2000s, it was only right that I give an honest review of the full line and purchase the Super Fan Bundle (retailed at $265) which includes the full product line of the 8 products, as well as a branded cosmetic bag. If you’re thinking, “Girl that bundle is too pricey for me,” I can assure you that for the value you're getting, the price is quite reasonable. This bundle was an intentional and marketable way to allow consumers to experience every Cécred product.
The brand messaging surrounding Cécred has been salon-inspired, and rightfully so as an ode to Beyoncé’s upbringing growing up in her mother’s hair salon in Houston. This line is backed by science and licensed cosmetologists showing that she’s done her research and appointed the experts. Cécred's IG feed has been filled with images and videos inside of hair salons including some videos of Ms. Tina herself assisting in the styling of beauty experts who visited Cécred's private salon to have the VIP treatment!
Now, have I seen influencers, consumers, and beauty stylists using the Foundation Collection at home? Yes, but I thought it was best to experience Cécred with my go-to cosmetologist who also happens to be my Auntie Tawana. She has been my educator and go-to for hair knowledge since I was a child and has had a hand in my mom's hair health which has always been goals for me. As a little girl, my Saturdays were spent sitting in her hair salon while my mama got her hair done as I patiently waited reading Jet and ESSENCE, ever so carefully eavesdropping on the conversations of the ladies who were coming for much more than just a beauty routine, but an experience.
I’d fall asleep on the plush couch in the waiting area flipping through magazines while listening to the sultry sounds of Maxwell. And I had my first lesson in breakup empowerment when I heard Sunshine Anderson’s “Heard It All Before.” So there was no other place for me to go than to see her, and because I’m her niece, I was able to visit her private salon in her home that she calls The After Hours where upon arrival I was greeted with my favorite Black-owned sparkling Rosé, candles lit, and my aunt’s breakdown of Cécred.
Yasmine Jameelah/xoNecole
But let me refocus and share my salon experience as I tried Cécred for the first time.
If You’re Wondering…Who is Cécred For?
Yasmine Jameelah/xoNecole
When news of Beyoncé potentially launching a beauty brand hit the internet, there were a bunch of predictions of what and who the line would be marketed towards and if she’d have any wig care products as she’s known for slaying her units! But she went in a totally different direction which I love, and I’m going to tell you why. Critics have questioned if Beyoncé should be venturing into the haircare industry because she is often seen in weaves and wigs, but true Beyoncé fans know that she has healthy hair and that, like many Black women, experiments with various styles.
Cécred was created for all hair types and textures, including straight to coily, virgin, color-treated, chemically processed, and heat-styled. As a Black woman who has worn wigs, had chemically processed hair, heat-styled, natural, and color-treated hair, let me tell you, this was no easy feat! The amount of money I’ve spent on my hair through its various changes just on product alone, forget styling has been astronomical.
Cécred is serving the needs of various hair types in textures and I truly believe that this is going to make Beyoncé a true competitor in the hair industry amongst brands that are comparable such as OUAI and Olaplex. Both competitor brands have similar items at a higher price point and unlike Cécred, their products and brand messaging haven’t always felt inclusive to Black women and other hair types.
Cécred has been tested inclusively and the reviews from various hair types and backgrounds of consumers are allowing the brand to stand out.
I Tried Beyoncé's Haircare Line Cécred: My Honest Review
Yasmine Jameelah/xoNecole
Yasmine Jameelah/xoNecole
My hair has never felt cleaner and it shined for well over a week following the styling (but the oil should be used sparingly if like me, oil can weigh down your hair.) Immediately when my hair touched the sink, my aunt told me that she saw all the dirt and oils lifting from my hair when she applied the clarifying shampoo. As a girl who loves my curls, I am often judgy when I use any other shampoo and conditioner aside from Pattern, but not this time.
When my aunt guided my hands across my hair, she showed me how my curls weren’t tangled, and how she didn’t need to comb out my curls before applying the moisturizing deep conditioner or the deconstructing treatment mask.
Yasmine Jameelah/xoNecole
She applied each step with care and walked me through the process, and to my surprise, the hair mask wasn’t thick - but through trial and error as a natural girl, I’ve learned that a thick mask doesn’t always equal what’s best for your hair. She styled me with a silk press that left my hair with shine and I can honestly say that each step of the line is needed especially if you are someone who changes up your hair and deals with breakage. If your hair is healthy, you can opt out of the reconstructing treatment mask but I recommend taking the product line to your salon, having a discussion with your stylist on where your hair health needs improvement, and then purchasing based on that.
We know ourselves better than anyone else, but your stylist knows your hair better than you do. I like to lead with their knowledge first and then incorporate what my hair goals are. If you’re a girly who’s committed to hair health and has either the discipline to incorporate each step at home or can bring your products to the salon, Cécred is for you no matter if you’re a silk press or a wash-and-go naturalist.
Give Cécred a try, I’ll be using the line for my hair appointments until it runs out and if I see long-term results, it will be added to the beauty regimen indefinitely.
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Featured image courtesy of CÉCRED