You’ve reviewed your spending and created a budget, and now you know exactly how much you spend on your home, your car, discretionary spending, and how much you divert to your retirement accounts. That’s all good, but what about your other savings, such as for an emergency? How does your financial allocation compare to the amount you should ideally spend and save?
Harvard bankruptcy expert Elizabeth Warren—named by TIME Magazine as one of the 100 Most Influential People in the World—coined the “50/30/20 rule” for spending and saving with her daughter, Amelia Warren Tyagi.
They co-authored a book in 2005: “All Your Worth: The Ultimate Lifetime Money Plan.”
So how does the 50/30/20 plan work? Here’s how Warren and Tyagi recommend you organize your budget.
Read more at the Balance