Sure! Let's apply the 50-30-20 Rule to Kalik's total monthly income of [tex]$1,750 to see how his money should be divided. The 50-30-20 Rule is a simple budgeting guideline that divides your after-tax income into three main categories:
1. Needs: 50%
2. Wants: 30%
3. Savings: 20%
Let's break this down step by step:
### Step 1: Calculate the amount for Needs (50% of total income)
First, determine how much of Kalik's total income should be allocated to his needs, which are essential expenses such as rent, utilities, groceries, and transportation.
\[
\text{Needs} = 50\% \text{ of } \$[/tex]1,750
\]
By multiplying 50% (or 0.50) by his total income:
[tex]\[
\text{Needs} = \$1,750 \times 0.50 = \$875.00
\][/tex]
### Step 2: Calculate the amount for Wants (30% of total income)
Next, determine the amount to be allocated to his wants, which are non-essential expenses such as dining out, entertainment, and hobbies.
[tex]\[
\text{Wants} = 30\% \text{ of } \$1,750
\][/tex]
By multiplying 30% (or 0.30) by his total income:
[tex]\[
\text{Wants} = \$1,750 \times 0.30 = \$525.00
\][/tex]
### Step 3: Calculate the amount for Savings (20% of total income)
Finally, determine the amount to set aside for savings or paying off debt.
[tex]\[
\text{Savings} = 20\% \text{ of } \$1,750
\][/tex]
By multiplying 20% (or 0.20) by his total income:
[tex]\[
\text{Savings} = \$1,750 \times 0.20 = \$350.00
\][/tex]
### Final Summary
Based on Kalik's total monthly income of [tex]$1,750, here is how he should divide his money using the 50-30-20 Rule:
- Needs: $[/tex]875.00
- Wants: [tex]$525.00
- Savings: $[/tex]350.00
Following this rule, Kalik can manage his income efficiently by ensuring that he meets his essential needs, enjoys some discretionary spending, and makes a conscious effort to save and invest in his future.
