Nationwide suggests the 50-30-20 rule, which allocates 50% of income to needs, 30% to wants, and 20% to savings or debt. However, the financial institution notes that this is just an example and can be adjusted to meet individual needs. "The 50-30-20 rule is just an example. You can split in any way to meet your needs," a Nationwide spokesperson said.
To create an accurate budget, Nationwide advises reviewing the last three months of spending. The institution also recommends setting small goals to reduce spending in specific areas, such as eating out, to stay engaged with the budget plan. "Setting a goal to try and reduce your spending in something you think you can cut back on, like eating out, can help you see extra money stay in your account," the spokesperson added. Nationwide also suggests that if giving up a subscription or coffee makes you unhappy, you can keep them and focus on cutting back elsewhere. "If giving up your Spotify subscription or Friday coffee will make you unhappy, maybe keep them. It's about balance and cutting back on things you feel you can give up comfortably," the spokesperson said.
The 50-30-20 rule is just an example. You can split in any way to meet your needs.
It is unclear what specific income or demographic the 50-30-20 rule is most suitable for, and whether Nationwide provides any tools to help implement the rule.
If giving up your Spotify subscription or Friday coffee will make you unhappy, maybe keep them. It's about balance and cutting back on things you feel you can give up comfortably.
Setting a goal to try and reduce your spending in something you think you can cut back on, like eating out, can help you see extra money stay in your account. Creating small challenges like this can help you to stay active with your budget plan. It encourages you to track your spending, making you focus on the bigger picture too.