Have you received your salary? Remember the 50/30/20 income management method.

Start managing your income using the 50/30/20 method.

When receiving the monthly salary, managing money can be a challenge with fixed expenses and others that arise. However, there are methods that aim to help with monthly organization, such as the 50/30/20 method.

This is a method that "helps manage the family budget efficiently, simply, and sustainably", according to the website Ei - Educação e Informação da Associação Mutualista Montepio, quoted in Notícias ao Minuto.

The basic principle of the 50/30/20 rule is to distribute net income among three categories of expenses: needs, wants, and savings (or debt repayment), as also stated.

We will see how the division of monthly income is done through this method.

Needs: 50% of income - "This category includes all essential expenses, that is, those that are essential to live. Here are some examples: rent or mortgage payments, transportation costs, car loan payments, insurance premiums, grocery shopping, and utility bills for electricity, gas, water, and telecommunications."

Wishes: 30% of income - "Here are all the superfluous expenses, that is, expenses that are not essential but make life more pleasant. These expenses include: meals outside the home, non-essential clothing, cultural activities, monthly subscriptions (gym and Netflix, for example), and vacations".

Savings or debt repayment: 20% of income - "This portion of income is intended for savings (for example, to safeguard retirement or children's education or create an emergency fund), investment, and debt repayment."

This rule 50/30/20 emerged, for the first time, in the book All Your Worth: The Ultimate Lifetime Money Plan (2005), authored by American senator Elizabeth Warren and her daughter, Amelia Warren Tyagi.

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