Managing personal finances wisely is essential to ensuring a solid financial future. There are numerous strategies to save and effectively manage income and expenses, such as the 50-30-20 rule, one of the most popular for its simplicity and versatility.
“The 50-30-20 rule consists of dividing income into three parts: 50% for basic needs, 30% for non-essential expenses and 20% for savings. In addition, it is advisable to separate the savings part as soon as you receive your salary and invest it in products that give profitability, such as a fixed-term deposit ”, explain the experts of the financial comparator HelpMyCash.
According to the 50-30-20 rule, half of the income must be used to cover basic needs. This includes the mortgage or rent payment, the payment of supplies, the food for the month, the expenses of public transport or schooling, in case you are studying or have children. That is, those costs that are essential to live.
This savings strategy continues to allocate 30% for those expenses that are expendable, but that improve the quality of life. This includes whims such as leisure activities, going out for lunch or dinner, buying luxury items or going on vacation.
This part can be difficult to fulfill and it is crucial to clearly establish the amount allocated to these wishes so as not to exceed it.
“Sometimes it is difficult to invest only half of the payroll in basic expenses. Since many times this percentage is higher due to inflation and low salaries. In these cases, a balance must be made by limiting the part that we allocate to whims or expenses that are not essential, and trying not to reduce the savings part ”, they point out from HelpMyCash.
This is the most important part of the 50-30-20 rule, as it is what will make your financial future more stable. As the experts indicate, it is advisable to withdraw this part of the money the first day the salary is received, so you know how much money is available for everything else.
"Although it is not possible to allocate 20% to savings, you can opt for a lower percentage and, above all, invest it in products that generate interest, such as fixed-term deposits," they point out from the comparator.
Currently, the deposit that offers the best 12-month yield in Europe is in Italy, offered by Banca Sistema with an interest rate of 4.40% APR. However, it is not available to everyone due to its minimum investment of 20,000 euros.
Fortunately, there are other deposits on the market with similar yields that can be contracted for as little as 1 euro. This is the case of the Latvian bank BluOr Bank, with a remuneration of 4.21% APR.
Although they are European banks, they can be easily contracted from Spain through the German platform Raisin. It is only necessary to open an account, select the deposit and transfer the capital to invest. The entire process is completely online and free.
For example, if you earn 1,300 euros, the 50-30-20 rule indicates that you have to save 260 euros each month. This money can be set aside in a remunerated account such as the EVO Welcome Smart Account that offers a 2.5% return. Each month, we will obtain 6.5 euros of benefits, so per year we will obtain savings of 3,198 euros.
If we invest this money in the BluOr Bank deposit at 4.21% APR at 12 months, per year we will have obtained a profit of 134.6 euros, which would add up to a total of 3,332.6 euros.
Therefore, the money will have been profitable twice, first with the remunerated account and then with the deposit.
“At HelpMyCash we always recommend distributing the money in several products and terms. Thus, while we have part of our savings blocked in a one-year deposit, we can have another part that we put each month in a remunerated account, which allows greater flexibility in case an unforeseen event arises ”, they conclude from the comparator.