We’re constantly looking for new money systems to make personal finances easy. This is why we’re excited to introduce a simple, yet effective system as a new Money Method in the Flow app! We welcome the 50/30/20 method!
Some people have a whole operating money system, and others are trying to set it up for the first time. If you need a first simple step into money organisation, this Money Method is yours. In this article, we’ll share how to set up the Money Method in Flow, and what you need to do that. If you would like to read more on the 50/30/20 method, then read this article.
This is how it works
The 50/30/20 method makes a division between:
Fixed costs & Necessities - 50%
Hobbies & Extras - 30%
Saving & Investing - 20%
You probably have one bank account that you use for all your fixed costs. You can keep that account to pay all the fixed bills, just like you do now.
In addition to that, you’ll need another bank account that you’ll use for monthly spending, like for going out, extra’s, sports, pocket money, holidays, clothing and gadgets.
Lastly, you’ll need a savings account and perhaps an investing account if you will, to build in an emergency buffer and take care of your future self.
How to set this up in the Flow app
2 bank accounts
1 savings account
What does that look like?
- Your salary comes in on your main bank account.
- From this account, you also pay the fixed costs.
- You leave 50% of your income on this account, and send 30% to Hobbies & Extras and 20% to your savings account.
Don’t you have an extra bank account?
Maybe you have one account for all your money. For overview and insight, it’s very helpful to have an extra account. Do you want to try it? It’s easy. Open a bank account at a new bank like Knab of bunq, as they provide many great features traditional banks won’t.
This is how to do it:
- Open a bank account at Knab or bunq.
- Create jars and budgets for Hobbies & Extras. For example: you might want to save some of this ‘monthly spending’ for a fun holiday, by setting aside for this each month.
- Easy does it!