24
Question about the 50/30/20 rule everyone swears by
I followed the 50/30/20 budget for a solid year, putting 20% of my income straight into savings. My friend looked at my numbers and asked why I was saving so much while still carrying a $3,000 credit card balance at 24% interest. I felt like an idiot. I was so focused on hitting that savings percentage that I was actually losing money every month to interest charges. The win was realizing I needed to pay off that high interest debt first, even if it meant my savings rate dropped to 5% for a few months. It felt wrong to break the rule, but my net worth is better for it. Has anyone else found a popular budgeting method that just didn't work for their specific debt situation?
3 comments
Log in to join the discussion
Log In3 Comments
wood.zara1mo ago
Man, I feel this in my bones. My version of this was spending six months following that "pay yourself first" mantra to the letter, saving every cent, while my car loan interest just laughed at me from the bank. It took a calculator and a sad cup of coffee to realize I was basically throwing money into a hole with a savings scoop. So I stopped, paid off the car, and only then started saving again. Felt like I was cheating on a religion, but my bank account finally stopped crying. Take the rules with a grain of salt and a side of your own math, honestly.
7
jordant693mo ago
Honestly that rule is solid because the savings habit itself is priceless, even with some interest.
5