The 3 numbers you NEED to know to secure your financial future

Budgeting can be hard work. Even with the best intentions, managing your finances can often feel totally overwhelming and super stressful. How much money should you put away each month? How many bank accounts should you have? How much debt is too much? Of course there are plenty of people you can ask for advice, such as family and friends, but chances are that their income and expenses are very different to yours. So what&rsquo;s a financially responsible person (or someone who would like to be a financially responsible person) to do? Enter the 50-20-30 rule &ndash; a simple method that takes the hassle out of learning how to save money and organise your finances. There&rsquo;s no need to resort to complicated spreadsheets or enlist the help of a financial expert if you want to learn how to save money for the future. The 50-20-30 rule provides effective and easy-to-understand guidelines for responsible financial management, whether you&rsquo;re a recent grad in your first job, a mother-of-two or saving for a mortgage. Just stick to the 50-20-30 rule to learn how to save money fast and plan for the future (while still having cash leftover to have some fun, too). To get started, first figure out exactly how much money you bring home each month. Next, track your spending &ndash; take note of where is the money going (that means noting down every expense, even those morning coffee runs!). It may sound boring, but it&rsquo;s totally worth it and will become much easier with practice. Then, divide your expenses into three categories of spending, also known as the 50-20-30 rule.<img alt="table-full-of-maths-and-charts__hero" class="ci-image ci-hero" src="https://ui3.assets-asda.com/dm/table-full-of-maths-and-charts__hero_GL?scl=1">50 - Your needsNo more than 50 percent of your income should go towards the things you need in your life, such as living expenses and essentials. This includes rent, utility bills, groceries and transportation. These payments shouldn&rsquo;t vary too much and are the ones you know that you have to pay every month. And no, having to buy your mum a birthday gift this month does not fall into the 'need' category! 20 - Your savingsAt least 20 percent of your income should go towards savings. This is where your financial goals come into play whether that&rsquo;s buying a house, paying off debt or just saving for a rainy day. It sounds tough, but once you get into the habit of putting aside 20 percent of your income into a savings account (or better yet &ndash; set it up automatically so you don&rsquo;t even have to think about it), it will soon become second nature. Remember to put one fifth of your income directly into a savings account that&rsquo;s separate from your other accounts, so that you&rsquo;re not tempted to dip into it. Your future self will thank you!30 - Your wantsNow for the fun part &ndash; your flexible spending. No more than 30 percent of your income should be used for all those things that you want to buy, but don&rsquo;t necessarily need. This is where your mobile phone bill, gym fees, holidays, shopping, eating out and other enjoyable spending comes in. It may be tempting to spend more than 30 percent each month, but be strict with yourself. <img alt="fingers-putting-coin-into-a-piggy-bank__hero" class="ci-image ci-hero" src="https://ui3.assets-asda.com/dm/fingers-putting-coin-into-a-piggy-bank__hero_GL?scl=1">That&rsquo;s it! Learning how to save money and budget doesn&rsquo;t have to be a chore; just stick to the 50-20-30 rule and you'll be ok. But remember, the percentages for your needs and your wants are the maximum amount you should spend. If you spend less that the recommended 50 percent and 30 percent, then you&rsquo;ll have more money for your savings. The great thing about this simple formula is that you only really have to break down your spending into three categories. And once you&rsquo;ve taken care of your needs and savings, you can indulge in that bottle of wine with dinner or a film night out with friends without any guilt. Easy!

Follow this one rule to never go over your budget again!

By Asda Good Living,26th July 2016

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