16 January 2023 , 16:28
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We're all feeling the pinch now with the cost of living crisis and Christmas having eaten away at funds, making January even harder. Sticking to a budget can often feel near impossible but a new trend on TikTok is aiming to make money easier to manage.
The 50, 30, 20 rule has over eight million views under its hashtag on the video app with thousands of people sharing the budgeting hack, hoping to help people manage money better.
Many have dubbed this the "ultimate money saving hack" that can be implemented with minimal effort and have great long term results.
There's still money for saving and spending with this TikTok budgeting hack [stock images] (Getty Images/Tetra images RF)Discover, learn, grow. We are Curiously. Follow us on TikTok, Instagram, Facebook and Twitter.
Simply put the rule says you should spend 50 per cent of your earnings on essentials than 30pc on non-essentials, with the remaining 20pc squirrelled away in savings.
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Essentials include your bills like heating, water and phone as well as food shops or council tax. This then leaves 30pc for non-essentials like nights out, new clothes or other treats.
Some have debated in comments on TikTok about what constitutes essential such as a new car or renovating your home. By the same token you may spend less one month and feel you can put a little more away the next.
This can be adjusted to reflect how much of your salary is needed for essentials, for example 60pc for bills and food with 40pc split between spending and saving.
Unfortunately in the cost of living crisis where many struggle to pay bills this might be harder to balance. Using percentages of the wage rather than a set amount means this can work for the majority of salaries but not all.
On TikTok the rule seems to be a hit, with one user commenting: "This is sooo smart I am def gonna use it" and another saying: "Thats so smart. You just saved everyone's life. What would people do without you. Omg."
However, some were fast to point out the limitations of this budgeting rule, one said: "My dad makes 1300/month, 50% of that would be 650, rent is 500, water and electricity about 100,so 50 left for all groceries for the month?"
Another added: "how do you budget out big needs that need to happen, like car maintenance? or vet visits for your pets? that’s what’s been holding me back."
While it has limitations and may not work for everyone it's an easy way to get people thinking about budgeting.