Managing your finances can be overwhelming, especially if you don’t know where to start. However, the 75-15-10 rule is a simple approach to personal finance that can help you stay on track and achieve your financial goals.

The 75-15-10 rule is based on the idea that you should allocate your income as follows:

• 75% of your income should go towards living expenses, such as housing, food, transportation, and other necessities.
• 15% of your income should go towards investments, such as stocks, bonds, and mutual funds.
• 10% of your income should go towards savings, such as an emergency fund, a retirement account, and other long-term goals.

Why the 75-15-10 Rule Works

The 75-15-10 rule works because it provides a balanced approach to personal finance. By allocating the majority of your income towards living expenses, you can ensure that you have the resources you need to cover your basic needs. At the same time, by allocating 15% of your income towards investments, you can grow your wealth over time and prepare for the future. Finally, by allocating 10% of your income towards savings, you can create a safety net for unexpected expenses and prepare for long-term goals.

How to Implement the 75-15-10 Rule

Implementing the 75-15-10 rule is easy. Simply follow these steps:

• Calculate your monthly income: Start by calculating your monthly income, including your salary, any side hustle income, and any other sources of income.
• Allocate your income: Next, allocate your income based on the 75-15-10 rule. If you’re having trouble sticking to the rule, consider using budgeting software or a financial planner to help you stay on track.
• Track your spending: Finally, track your spending to ensure that you’re sticking to the rule and making progress towards your financial goals.

Benefits of the 75-15-10 Rule

The 75-15-10 rule has several benefits, including:

• Simplicity: The 75-15-10 rule is simple and easy to understand, making it accessible for people of all levels of financial knowledge.
• Balance: By allocating your income based on the 75-15-10 rule, you can achieve a balance between spending, investing, and saving, ensuring that you’re prepared for both the short-term and the long-term.
• Flexibility: The 75-15-10 rule is flexible, allowing you to adjust your spending, investing, and saving based on your personal goals and circumstances.

In conclusion, the 75-15-10 rule is a simple and effective approach to personal finance that can help you stay on track and achieve your financial goals. By allocating your income based on the rule, you can ensure that you’re spending, investing, and saving in a balanced and effective way.