Fidelitys 50/15/5 rule addresses the most important financial goals by allocating your paycheck accordingly.
Both are general budgeting rules of thumb that help you decide how to divvy up your income.
Fidelity tosses another rule of thumb into the ring.
Their 50/15/5 rule focuses on balancing multiple financial goals.
15% percent goes to retirement savings.
They also suggest you increase this by 1% each year.
5% goes toward unexpected monthly expenses or building an emergency fund.
Of course, this doesnt add up to 100.
So what do you do with the rest of the money?
Thats up to you.
you could increase your retirement savings, save for another goal, or throw more at your debt.
It depends on your financial situation.
Its not a guideline for everyone.
If youre living hand to mouth, your paycheck may barely cover your living expenses.
But if youre trying to balance multiple financial goals, this is a solid rule to consider.
Fidelity also has a budget checkup tool to see how your actual savings and spending compare with their guidelines.
You cantry it for yourself here.
And t learn more about their 50/15/5 rule, check out the full article at the link below.
The 50/15/5 Guide: A Simple Approach to Budgeting| Fidelity
