Questions: In the 50-30-20 Rule, 50% of your income should be spent on

Transcript text: In the 50-30-20 Rule, 50% of your income should be spent on

Solution

The answer is A: needs.

Explanation:

50% on Needs: The 50-30-20 Rule is a popular budgeting guideline that suggests allocating 50% of your income to needs. Needs are essential expenses that are necessary for survival and basic functioning. These typically include housing, utilities, groceries, transportation, insurance, and minimum loan payments. These are expenses that you must pay and are difficult to avoid.
30% on Wants: This portion of the rule suggests that 30% of your income should be spent on wants. Wants are non-essential expenses that enhance your lifestyle but are not necessary for basic living. Examples include dining out, entertainment, vacations, and luxury items.
20% on Savings and Debt Repayment: The remaining 20% should be allocated to savings and debt repayment. This includes contributions to savings accounts, retirement funds, emergency funds, and paying off debts beyond the minimum payments.

The 50-30-20 Rule is a simple way to manage your finances and ensure that you are living within your means while also saving for the future.

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