An obstacle to us in our pursuit of our dreams, is not being organizied. Organizing our financing can be used to help us to obtain a good result in reaching our goals (dream). A percentage rule is a simple way to take control of the finances needed to give us some financial structure or strategy that will help us to make our journey possible. A good way to keep it simple is to consider using a percentage-based budget that divides up your monthly after-tax income into categories. One of the most common types of percentage-based budgets is the 50/30/20 rule. The idea is to divide your income into three categories, spending 50% on needs, 30% on wants, and 20% on savings.

Learn more about the 50/30/20 budget rule and if it’s right for you.

Budget 50% for necessities

Your necessities are usually your living expenses and should account for 50% of your after-tax income. Necessities are things you need that aren't optional. They're different from your wants, which are things you'd like to have but don't need to survive.

Examples of necessities include:

Utilities

Groceries

Health care

Student loan payments

Rent or mortgage

Transportation costs

Credit card and other debt payments

Childcare

Insurance

How much you need for your necessities may change over time. If you pay off your student loan, for example, you'll have some extra money in your necessities budget that you can use for other expenses. You could use it to make higher monthly payments on your vehicle loan, mortgage or another loan, for example, which could help you pay off your debts faster.

Budget 30% for wants

Your wants are things you'd like to have but aren't necessary for survival. They're different from things you're saving for, like a house or vacation (these are your long-term savings goals and are included in the "savings" section of your budget). Wants should account for 30% of your after-tax income.

Examples of wants include:

Dining out

Spa treatments

Designer clothing

Club or gym memberships

Tickets to sporting events

Subscriptions to streaming services

Spending money on things you want is a great way to reward yourself for working hard. You can use it to motivate yourself to accomplish goals, for example, which may improve your quality of life and personal fulfillment. Your wants can also change over time. When you mark an item off your list, you can then add another to help you stay motivated to achieve your next goal. Though some dreams may not need financing, understanding the importance will help you through life no matter what you do. This life skills that will give you a leg up to finding your journey to be self sufficient. To be able to succeed in what ever dream you pursue.

Thank Citizen Bank for the advise in explaining the above rule.