Need vs Want and the 50/30/20 Budget Method
Is that case of craft brew a necessity, or a luxury? What about that additional streaming channel, those designer mud flaps, and that second set of socket wrenches? When making financial decisions and formulating a financial plan, it’s important to know the difference between what we need and what we want. When developing a budget, focus first on the needs – those things you have to have – while allowing for “wants” as well. Necessities should be 50% of your budget, according to the “50 (needs)/30 (wants)/20 (savings)” method – but you can still have that craft brew and fishing channel – just maybe not the mud flaps.
Advice from Nerdwallet on defining needs and wants
About that 50/30/20 budget method… from The Balance and also check out:
as well as…
Needs-vs-wants from Smart Asset
Help your kids learn this, too – like Elmo did on Sesame Street.