The Saving Corner: Use the 50/30/20 rule to help save for a home

by | Dec 14, 2022 | Blog, Buying a Home, Mortgage & Finance, The Saving Corner | 0 comments

With interest rates on the rise, a large down payment can make the difference between a mortgage you can afford and one you can’t. We know saving for a down payment can feel overwhelming – but we’re here to help! Today, we’re starting a new series where we’ll offer a simple tip each month on how to save for that down payment and meet your home goals.

Today’s tip: the 50/30/20 rule

If you want to stash money away for a down payment, starting a budget is important. But most people find budgeting too cumbersome to manage long-term. Enter the supremely simple 50/30/20 rule: Instead of splitting your after-tax income into a long list of line items (gas, haircuts, dry cleaning, etc.), use three broad categories: your needs, wants and savings. Save 50% for needs, 30% for wants and 20% for savings. “By regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently,” notes N26, a digital bank. “And with only three major categories to track, you can save yourself the time and stress of digging into the details every time you spend.”

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