PocketStrategy

What is the 50/30/20 Rule? The 50/30/20 rule is a simple budgeting rule that manages your money by dividing it into 3 categories:  50% for Needs: These are the necessities, such as food, water, electricity, rent, etc... 30% for Wants: This is fun money; like going to the movies, eating out, or buying a new pair of shoes. 20% for Savings: This is money you save; emergency fund, college fund, pay off debt, retirement, etc... It is a simple yet effective rule. Does It Work For Everyone? The 50/30/20 rule is a great starting point, but it may need some adjustments depending on your income and goals. For example, if you have debt, you may want to put less towards wants and more towards savings. If you have high fixed expenses, you might need to put more money towards fixed expenses and less towards wants. How to Make it Work For You Track Expenses: To know what percentage of money to put towards needs, you need to know how much you are spending. Are you spending more or less than you th...

Inflation is when prices increase over time, this results in your buying power decreasing. This is a massive issue for households as it makes everyday expenses such as gas, groceries, and rent more expensive. As inflation rises, people need to spend more money to buy the same amount of products. This paper will explore how inflation affects household budgets, especially food and housing. This paper shall also explore how families adapt.  Rising Costs: The most noticeable effects of inflation are on basic needs, like gas and food. For example, families need to spend more on groceries as the prices have increased. Items like milk, eggs, and bread cost more, forcing people to either spend more or buy less. Gas prices have also increased, causing driving and shipping costs to increase. These small price increases add up over time. How Inflation Affects Different Areas:  Inflation doesn't affect everywhere the same. The impact inflation has varies depending on where you live, this ...

   "The information provided on this blog is for general informational purposes only. It is not intended as professional financial advice. Please consult a professional before making any major financial decisions". What is an emergency fund? An emergency fund is money set aside for unexpected things that may come up out of nowhere, like repairs, medical bills, or if you lose your job. It's money you can use when life isn't going your way.  Why is an emergency fund so important? Having an emergency fund is a great way to avoid taking on debt or taking money away from other goals, such as retirement. Avoid taking out money from your retirement, as that will set your financial goals back.  Bankrate's emergency savings survey found that:  Nealy 60% of Americans are uncomfortable with their level of savings.  27% of Americans wouldn't be able to cover a month's expenses if they lost their job tomorrow.  How much should an emergency fund be? The general...

 "The information provided on this blog is for general informational purposes only. It is not intended as professional financial advice. Please consult a professional before making any major financial decisions". What is compound interest?  Well, compound interest is interest that applies to your initial investment and any profits from your investment. This may sound confusing at first, but this is actually a simple concept once broken down. Why Invest Early:  The key to compound interest is time. The longer your money is invested, the greater the effects of compounding. This is why you should start saving for a house or retirement sooner rather than later.  For Example:  A sum of 5000$ is invested for 3 years with an average return rate of 5%. After the first year, you would have 5250$, an extra 250$. After the second year, you would have 5512$(5250$*1.05). You gained 262$ in the second year whereas you only gained 250$ in the first year. Over 10 years, yo...

 "The information provided on this blog is for general informational purposes only. It is not intended as professional financial advice. Please consult a professional before making any major financial decisions". Let's face it, budgeting is hard. No one wants to stick to a budget, you work hard at your job and want some indulgence. The key is to find a balance, so you can have fun but also plan for the future. Track Spending:  The first thing to do is look at your total income, this can be from your job, side hustle, or parent contributions. Next up is to add up all expenses, both big and small. Everything from rent and car payments to subscriptions; this way you can get the full picture. This may be time-consuming at first but is worth it in the long run.  Generally, your expenses can be summed into 2 categories, fixed and variable. Fixed expenses tend to stay the same and usually include rent, car payments, phone bills, etc... Variable expenses are harder to track ...