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The 50/30/20 rule is a budgeting guideline where 50% of your income goes to needs (housing, utilities, food), 30% to wants (entertainment, dining out), and 20% to savings and debt repayment. This method provides flexibility while ensuring essential expenses are covered and savings goals are met. Adjust these percentages based on your specific situation and location.

Financial experts recommend saving at least 20% of your monthly income. This includes retirement contributions, emergency fund savings, and other financial goals. Start with building an emergency fund of 3-6 months of expenses, then focus on long-term savings goals. If 20% seems challenging, start with a smaller percentage and gradually increase it.

A healthy expense ratio is typically below 80% of your income, leaving at least 20% for savings and debt repayment. Housing costs should ideally be below 30% of your income, total debt payments below 36%, and discretionary spending (non-essentials) around 30%. Track your expense ratio monthly to identify areas for improvement.

To reduce monthly expenses: 1) Track all spending to identify areas of waste, 2) Negotiate bills like insurance and utilities, 3) Cut subscription services you rarely use, 4) Plan meals and reduce dining out, 5) Use energy-efficient appliances to lower utilities, 6) Consider a less expensive housing option if possible, 7) Use cashback credit cards for regular purchases, 8) Buy groceries in bulk when on sale.