Nationwide’s 50-30-20 rule that could save you money

Nationwide has urged people to try the '50-30-20' rule to help them save some money . To do this, you need a clear idea of your income and spending . The experts at Nationwide suggest "creating a budget plan" and say the 50-30-20 rule is a great start. The idea is you'd aim to spend your income in three ways. This means you split your monthly salary into musts, wants and bills . 50% on musts – your fixed outgoings and essential living expenses 30% on wants – your day-to-day spending and the things you enjoy 20% on savings or debt – paying more than your minimum payments or putting money into a savings account, pot, ISA or investment Giving an example of how it could look if your monthly income, after tax and other deductions, is £1,500: £750 on needs £450 on wants £300 on savings or debts If this is not possible, it says: "The 50-30-20 rule is just an example. You can split in any way to meet your needs." To make sure you stick to your plan, you need to list all your expenses. Write down everything you spend money on, and don’t forget extras like impulse purchases or social spending, such as eating out. In a handy tip, it suggests reviewing your last three months of spending. Check your recent transactions to spot patterns and any one-off expenses. This helps you understand what a typical month really looks like and makes your budget more accurate. Rent or mortgage Water, gas and electric bills Childcare Car payments Council Tax Home insurance Contents insurance Car insurance Phone bill Travel, such as to work or holiday costs Essentials Car payments Petrol Basic toiletries Food Prescriptions Subscriptions like Netflix, Spotify, YouTube, Amazon Prime, HayU, Apple TV and Disney+ Eating out Personal treats Hobbies Debt Phone bill Memberships like the gym or the cinema You may also want to consider any longer-term savings such as: Home deposit Emergency fund Renovations Sinking funds Christmas Holiday Birthdays If you are really struggling, it's best to cut down on treats, such as a morning coffee, Netflix or lunch out. But Nationwide says that "if giving up your Spotify subscription or Friday coffee will make you unhappy, maybe keep them. It's about balance and cutting back on things you feel you can give up comfortably". In its final piece of advice, it suggests: "Setting a goal to try and reduce your spending in something you think you can cut back on, like eating out, can help you see extra money stay in your account. "Creating small challenges like this can help you to stay active with your budget plan. It encourages you to track your spending, making you focus on the bigger picture too." For more money-saving tips, you can read their full tips here. You can also read a range of financial advice here .