FINANCE
How To Improve Your Financial Situation
80-20 Strategy
Now, if you find the 50-20-30 rule and even putting the money in different envelopes difficult, there is another way. The 80-20 plan is easy. Rather than trying to sort over every transaction and determine what is necessary and what isn’t, you just set aside 20% of your salary and put it straight into your savings. The remainder is yours to do with as you like.
The key to this strategy is to set up automated transfers that deduct 20% of each salary as soon as it appears in your accounts. It’s as if you’ve never would have the income to spend in the very first instance since it’s automatically transferred to a different savings account. And if possible, try to set up a direct deposit.
