1 I hear the phrase discretionary income thrown around a lot. Who has extra money? After I put my paycheck toward my necessary expenses, how much of what's left over should I consider saving or investing-and what can I feel comfortable spending on fun stuff?
Not everyone can have discretionary income, but being savvy about your money will allow you to do as much with it as you can at any income level. It all comes down to smart budgeting.
The most standard budgeting template you'll come across is something called the 50/30/20 rule. Fifty percent of your money goes toward necessities, 30 percent toward wants, and 20 percent toward savings-that chunk encompassing both short-term savings goals and investments. While experts argue about the specific ratios, it's generally a good framework. The exact benchmarks don't matter quite as much as adopting the right mindset.
As Nischa Shah, a qualified accountant and former investment banker who offers financial tips to her audience of over a million YouTube subscribers, explains, the most important step is adopting a mentality of paying yourself first. Most people, she explains, will first pay for their necessary expenses, then spend their money on their wants, and then try to save what's left over, only to find out that they don't have anything left to save. Instead, she recommends taking your goal savings rate, 10 percent at minimum, out of your paycheck straightaway, and spending the rest of what's left over after your fixed expenses as you please.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
SHABOOZEY THE BIG SHA BANG
Shaboozey spent months at the tippy-top of the charts with a hit song about dealing with hard times the easy way: by hitting the bar. He sang on a couple songs with Beyoncé too. So we asked the one and only SHANIA TWAIN to help country's biggest new star make sense of his explosive year.
HANNAH EINBINDER BORN STANDING UP
With her star turn on Hacks, the comic turned actor has established herself as one of Hollywood's most exciting young talents-much to her own surprise.
Katt Williams The Man Who Opened The Portal
In January, the comic delivered an instantly iconic podcast interview that threw pop culture into crisis-and seemed to predict all manner of messy celebrity gossip to come. At home on his farm, Williams explains why he said what he said— and why he'd do it again, and again, and again....
JOHN DAVID & MALCOLM WASHINGTON A NEW HOLLYWOOD DYNASTY
The Washington brothers built their careers apart—until an irresistible project drew them together. In The Piano Lesson, they tackle a father's thorny legacy.
FUTURE & METRO BOOMIN'S HISTORIC Hit STREAK
What happens when the best rapper alive reunites with the hottest producer of the moment? You get a back-to-back-to-back run unlike any since the Beatles.
PHARRELL WILLIAMS Designer of the Year
Riding along from Paris to Hollywood to New York with the Louis Vuitton *men's creative director, whose prolific and often prophetic contributions to fashion, film, and music have once again thrust him to the center of the pop culture Venn diagram.
JOHN MULANEY. KID GORGEOUS GROWS UP
After immortalizing the whirlwind of the past four yearsrelapse, intervention, recovery-in his awardwinning standup special, John Mulaney has emerged as one of the most popular comedians on earth. For his next trick, he's embracing his surprising new role as a suburban dad.
DWAYNE JOHNSON THE WORLD'S BIGGEST Actor
It's hard for Dwayne Johnson to hide. Wherever he goes, there he is― as conspicuous out in the world as he is on the silver screen. But after two decades of playing a version of himself in huge movies, suddenly Dwayne Johnson is ready to do something entirely new: vanish.
How the WNBA Became the Most Fun, Complicated, and Exciting League in Sports
Caitlin Clark! A'ja Wilson! Angel Reese! This year, women's hoops emerged as a dominant popcultural force. But the road to sports-league supremacy has been long and winding. This is the inside story of how the W finally broke through.
A Companion for Your Wrist
Audemars Piguet's new release with artist Brian Donnelly, a.k.a. KAWS, brings high-art hype to the world of pop-watch collabs.
