## What is 50/30/20 and why do you need it?

The 50/30/20 Budgeting Rule is a great concept for anyone who wants to get a handle on their money. It basically splits your money up into three areas: needs, wants, and savings. Under the rule, 50% of your money should go towards needs, 30% towards wants, and 20% towards savings, so a person who makes \$1,000/month would have \$500 go towards needs, \$300 towards wants, and \$200 to savings. Simple enough, right? There are a couple of challenges with this: 1. How easy is it to determine what’s a need and what’s a want? 2. Where do I calculate this?

FitFin makes these challenges easy for you (or easier, we should say). First, we tweaked the rule a little bit so that 50% of your take home pay goes to fixed costs (rent, mortgage, phone bill, etc.). These expenses typically stay the same each month with maybe just a little fluctuation. Then 30% goes towards your variable spending (groceries, going out to eat, entertainment, etc.). These things can vary each month and even be a little unpredictable, so FitFin helps by giving you spending tools to help you get a handle on this unpredictable area.

The best part is that FitFin helps guide you through the entire process of setting up your budget, and automatically calculates your numbers towards the 50/30/20 Rule! The first thing you do when you sign up is enter your take home pay, then your fixed costs. Notice the second number (2400) in the left image below, then the percentage behind it. FitFin automatically calculated that \$2,400 is 48% of \$5,000.

Then FitFin takes it a step further on the variable spending page (right image below) by completing the calculation for your day-to-day spending. This gives you a complete picture of what you can spend. Notice at the very bottom of the right image a leftover percentage of 20%. This is automatically calculated by the numbers entered in the system based around 50/30/20. You may or may not hit the 20%, but this will give you a guide of where you stand versus the model.

And if your numbers aren’t where they need to be, FitFin gives you a breakdown of your spending with our Spend by Product and Spend By Store features.  These allow you to see EXACTLY where your money goes down to the specific product level (a.k.a. I spend HOW MUCH on Twinkies???). Here’s an example of what these both look like:

And finally, to help you with your spend control, FitFin gives you spend-predictive shopping lists that tell you what you’re going to spend BEFORE you shop. This is proactive budgeting, not reactive like most budgeting tools out there.