The 30-30-30-10 investment (or budgeting) strategy is a method for allocating your income across different expense categories. It's a guideline to help manage your finances effectively.
Breakdown of the 30-30-30-10 Rule
Here's how the 30-30-30-10 strategy works:
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30% Housing: Dedicate 30% of your income to housing costs. This includes rent or mortgage payments.
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30% Necessities: Another 30% of your income should cover essential expenses. This includes groceries, transportation, utilities, and healthcare.
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30% Financial Goals: Allocate 30% of your income towards financial goals. This could include investments, debt repayment, and savings.
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10% Personal Spending: The remaining 10% of your income is for discretionary or personal spending. This is for entertainment, hobbies, dining out, and other non-essential items.
This approach to budgeting offers a simple framework for allocating your income to ensure your needs are met while also working towards financial security. Remember to adjust these percentages based on your personal circumstances and financial goals.
