Ramses Delgado, Banking Moderator
@ramses_delgado1
The 60-25-15 rule is a financial planning guideline that suggests dividing your income into three categories: 60% for essential living expenses, 25% for savings and investments, and 15% for discretionary spending.
Breakdown of the 60-25-15 Rule
- Essentials (60%): Covers housing, utilities, groceries, transportation, insurance, and other necessary bills. The idea is to keep your fixed costs manageable so you don’t feel financially strained.
- Savings & Investments (25%): Includes retirement accounts, emergency funds, long-term investments, and debt repayment. This portion builds financial security and prepares you for future goals.
- Lifestyle (15%): Allocated for dining out, entertainment, hobbies, vacations, and personal indulgences. This ensures you enjoy life today without jeopardizing tomorrow’s stability.
The 60-25-15 rule is slightly more conservative on lifestyle spending compared to the popular 50/30/20 rule, prioritizing savings more heavily. You can compare the best budgeting strategies here on WalletHub to ensure that whichever option you choose truly aligns with your goals.
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