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Nowack & Olson, PLLC Florida Bankruptcy Lawyer
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The 50/30/20 Budget Rule Is the Epitome of Aspirational Claptrap

Bills

Making a budget is one of the most popular New Year’s resolutions.  Tracking your spending and then deciding to stick to certain spending patterns can help you avoid impulse purchases paid for out of your own funds or on credit.  It is possible to cancel some of your content subscriptions or to resolve to avoid Panera Bread and instead to use the proceeds toward debt repayment; if you do this, you can make a considerable dent in your debt balances over the course of a year.  Sometimes, though, recreational spending is not the problem.  When was the last time that you, or anyone you know, took a vacation, dined at a sit-down restaurant, or did anything besides work and pay bills?  When you are trying to develop a practical plan for getting out of debt, reading generic personal finance advice that was written before the onset of financial long COVID only adds insult to injury.  To find out more about debt repayment solutions that are applicable to your situation, contact a Plantation debt lawyer.

Who Still Has 50 Percent of a Paycheck Left After Paying Bills?

The 50/30/20 budgeting strategy advises you to create a budget where you spend 50 percent of your paycheck on necessities, 30 percent on wants, such as entertainment, travel, and dining out, and 20 percent to savings, whether in the form of contributions to your employer-provided retirement plan or deposits into a personal savings account.  The problem with this strategy is that its understanding of “necessities” sounds like it comes straight out of a second-grade social studies class.  It assumes that your only recurring bills are rent or mortgage, groceries, utilities, and phone and Internet.  It does not account for the fact that many of us also make payments every month on car loans, student loans, credit cards, BNPL agreements, back taxes, child support, medical bills, and other things that do not provide us with food and shelter but which we are still obligated to pay.  If your income is so high that it only takes half of your paycheck to pay for all of those things, then you have a cushy job, indeed.

If your goal is to pay down your debts, your only option is to cut your spending on fun stuff and your contributions to savings almost down to zero, but you have probably already done that.  The only way to get to a place where you can survive on half of your income is to make some of your debt go away quickly.  This could mean taking out a debt consolidation loan to pay off your non-recurring debts.  It could also mean filing for bankruptcy and discharging old credit card debt and medical bills, so you can get one step closer to paying down your non-dischargeable debts.

Work With a Debt Lawyer About Getting Into a Financial Position Where You Can Budget

A South Florida debt lawyer can help you if your financial situation is so desperate that all of your income goes to household bills and minimum payments on debts.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.

Source:

bankrate.com/banking/what-is-the-50-30-20-rule/#what-is

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