Does the 50-15-35 rule really work? See if it's worth it! 

The 50-15-35 rule is often discussed again, and the reason is simple: everyone is looking for a practical way to control their monthly budget.

But is this rule really efficient? After all, how does it work in practice?

In today's material we will explain in detail how this concept works, as well as seeing its application in a practical way.

So, if you need a little help with your monthly budget, come and find out about this proposal!

How does the 50-15-35 rule work?

New concepts for controlling your monthly budget emerge every day. After all, organization is essential to avoid delays and possible debts.

The 50-15-35 rule is one of the most traditional, and this is because it is simpler than the ideas we usually see out there.

In this rule you basically divide your monthly budget into 3 parts: 50%, 15% and 30%.

In this division, 50% of the budget is for essential expenses, 15% is for investments and financial obligations and 35% is for lifestyle. We will now look at each of the “slices of the pizza” in detail.

50: Essential expenses 

The “slice” of essential expenses corresponds to 50% of the monthly budget, and the reason is obvious: no one can stop paying bills just to invest and save money, right?

The 50-15-35 rule is one of the most realistic, as it considers that a large part of our budget needs to be used to cover basic needs, such as:

• Utility bills;
• Food;
• Studies;
• Transport;
• Housing;
• Among other important points.

The idea is that you try to keep your essential expenses within the 50% margin of your total income.

In this case, if your essential expenses exceed 50%, try to find ways to reduce these costs in order to balance the accounts.

15: Investments and financial obligations 

The only way to change your financial life is through investments and strategies that optimize your income.

Therefore, the 50-15-35 rule states that 15% of your monthly budget should be allocated to investments and financial obligations.

So, if you need to make that emergency fund or even save money for a future plan, this is the right slice to use.

35: lifestyle

As much as many investment “gurus” try to convince us that it is more advantageous to live with just the basics and allocate as much as possible to investments, we know that in practice it doesn’t work that way.

We all have hobbies or even simple practices that bring us pleasure, relaxation and even personal growth.

In the 50-15-35 rule you should allocate 35% of your budget for this purpose, in order to find balance and happiness.

So, if you enjoy reading, playing sports or even want to go on vacation, this part of your budget will be used for that.

Applying the 50-15-35 rule in practice 

By now you understand the concept of the 50-15-35 rule, but it may still be a little fuzzy in your head.

So, we will now look at a practical example, which will help you understand how everything works on a daily basis.

Let's take the example of Maria. 

Maria has a monthly income of R$2,500.00, lives alone and enjoys going to the gym and a book club.

Using the 50-15-35 rule, Maria's budget would look like this:

• 50%: R$ 1,250.00 for food, housing, basic bills, etc.
• 15%: R$ 375.00 for investments and bonds
• financial.
• 35%: R$ 875.00 for the gym, book club and other lifestyle-related activities.

As we can see, Maria's budget was well divided, so that she could cover both her basic expenses and her hobbies, without giving up her investments.

+Main certifications for working in the financial market – Valorizei.

Is this method worth using?

Throughout the previous topic you saw in practice how the 50-15-35 rule works, so now we just need to define: after all, is it worth using this method?

And the answer is: it depends!

As we can see in Maria's example, the budget would result in the value of R$ 1,250.00 to cover basic expenses, but, depending on the region where she lives, perhaps a good part would be spent just on housing.

So, the scenario becomes very different depending on Maria's situation: does she live in a rental property? Does she own a house?

The same goes for food, for example, because the scenario changes if:

• Maria eats where she works once a day;
• Mary has children;
• Maria follows a specific diet, with high-value foods.

Therefore, we can consider that this 50-15-35 rule will work depending on each person's life reality, as well as income.

This is because, for someone who earns R$ 10 thousand per month, spending 50% (R$ 5 thousand) on basic expenses may be enough and even have some left over.

So, assess your situation carefully, and consider every aspect of your life when deciding what type of monthly budget is right for you!

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