MoneyMakingEasier

This is for the people who think my blogs are too long. I got the most important questions and gave them simpler responses. These are some of the most frequently asked questions.

What Is The 50/30/20 Budget Rule?

The 50/30/20 budget rule is when people separate how they will spend their earned money. 50% of earned money goes to needs, such as food, housing, schooling and bills. 30% goes to wants such as eating out, daily coffee, a new car and/or hobbies. 20% (this is a big one always remember it) goes to saving and investing. People don’t realize it now but over time that 20% could help you lifelong. You might even get to retire early.

What Is A Budget?

A budget is a complex (or non-complex) plan of how you plan on saving money and spending money. Most people use budgets to help plan for things in advance and others estimate. A budget is normally fixed on a person’s paycheck and how much you can spend or save. Every person follows a different budget and has different needs.

What Is An Emergency Fund?

An emergency fund is when you slowly put a lot of money into a separate account in the bank called Emergency Fund (or Emergency Trust Fund). An emergency fund is when you use the money you had saved and spend it on emergency expenses. This could be a sudden hospital bill, car damage and/or house repairs. Many people have these and though most people don’t always use it, it is important to have.

What Is Inflation?

Inflation is when things become more expensive over time. For example, renting. House renting used to cost a lot back then and still is a lot. While people did manage to rent houses, it is less likely now because of the rising inflation. Another example is a few years ago a biscuit would have cost $1 but now costs $1.25. Why is that? Economists believe it is because people are buying a lot, but the producers have less to sell. Over time people get more money (through raises) but if we didn’t have inflation the prices on things would be the same. Yes, you could have been rich but if everyone is rich then what is the point? You can buy 10 cars, but your neighbor could also buy 10 cars. Inflation is the keep people in a reality check on what they spend.

How Can I Get Out Of Debt?

You can budget to help save money to pay off the debt. Budgeting is the most reliable way to pay off debt. Taking out a loan would also solve the problem but then you would be in more debt. Don’t create new debt while already in debt because then you forget about your previous debt. That would eventually lead to you being broke and poor. Another good option is slowly saving up from your paycheck to pay it off. You can also pay some off slightly. Even if it’s just a few hundred dollars it will help keep off things like interest.

What Is A Loan?

A loan is typically done with the bank. Basically, when you are in debt or need extra money, you go to the bank and ask for a loan. The bank will loan you money and you can pay your debt. But then you owe a debt to the bank. This is not as bad because you can pay it after a long period of time, but something called interest builds up. If you loan money out for too long, interest is when you owe about 10% more money because you are taking too long to pay. This prevents people from holding out loans for a while.