How the 50/30/20 budgeting rule works—and can help simplifying how you spend money

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Having a household budget can help you stay on top of bills, pay off debt, save for retirement, and achieve other long- and short-term financial goals. But there are many ways to go about it.

One popular budgeting option is to follow the 50/30/20 rule, which requires you to allot a designated portion of your earnings to savings, wants, and needs. This method is also called “the balanced money formula,” as it can help you strike a healthy balance between saving and spending.

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