Struggling With Energy Bills? The 50/30/20 Budgeting Rule Could Help

Sincerely Media on Unsplash" />Budgeting on an iPad at a window.If you live from one payday to the next, you’re not alone. In fact, according to the Debt Management experts at Intrum, 40% of people scrape by each month, desperately waiting for their next payday.Of course, rises in energy bills and an ongoing cost of living crisis only make this harder, with 24% of people admitting that they have no savings at-all.As we head into yet another tough financial year, Adrian Murphy, CEO at wealth management firm Murphy Wealth urges: “When things get a bit tight, people try to make their income fit their lifestyle, they’ll overspend and use credit cards and end up in debt, and you’re never going to get anywhere like that.”Instead, he recommends a budgeting lifestyle hack to help manage your finances.The rules for the 50/30/20 budgeting lifestyle50% of your money should go to your ‘needs’Murphy explains: “Starting off, you have to look at, ‘What do I have?’, ‘What are my needs?’“Which will be your bills, your roof over your head, and the big one that people forget is food. Your food will be a significant part of your needs. Food inflation has been huge, and you need to be realistic.“Most banking apps have spending analysis tools on them, and I’d highly recommend people use them, it can be eye-opening to see how much you spend a day.”30% of your money should go on your ‘wants’Murphy said: “Your wants will likely be made up of socialising, sports clubs and various other things you might do.”This percentage, he encourages, is where you can have a ‘bit of fun’ and use this money to do the things you want to do.20% of your money should go on clearing debts or savings“First and foremost, clear your debts,” Murphy emphasises.If you’re in a significant amount of debt, that’s got to be your priority because debt is killing you.“If you don’t clear it, compounding up of really high interest rates, credit cards, store cards, all of that stuff is brutal and is ruining your finances in the long term.” If you’re fortunate enough to not be in debt, put your 20% towards rainy day savings. If you are struggling with debts, get in touch with StepChange, the UK’s leading debt charity.Related...The 'Loud Budgeting' Hack That’s Actually Helping People Save MoneyThe First Thing You Should Do When You Decide To Pay Off Your Debt'Money For War But Not The Poor': Ex-Labour Candidate Slams Welfare Cuts Plan On BBC Question Time