Budgeting rules that help in efficient business finance management.
July 13, 2020
According to our research, over 70% of our target customers have experienced a drastic reduction in sales during this pandemic so it is very important small businesses efficiently manage the small revenue they make.
The 50:30:20 rule was made popular by Elizabeth Warren in her book titled All your Worth. This is a very easy-to-use rule that you can use as a small business owner and begin to see the impact in no time. It is effective and it ties strongly with the JidiTrust culture of encouraging proper record keeping.
The rule simply encourages you to use 50% of your income to handle needs, needs can include rent, house bills, food, and transportation. After handling your needs it encourages you to use 30% of your income for wants, wants can include buying airtime, going to a restaurant for dinner, buying a new phone, and other wants.
Finally, the rule encourages you to use the last 20% of your income for savings. You can save for a lot of reasons: business expansion or even emergency expenses. One of the most useful ways of savings is using Susu, you can also use a savings account at a bank nearby. With this rule for every 100 cedis you get, use 50 cedis for needs, 30 cedis for wants, and save 20 cedis. If this is a weekly behavior, you can save over 1,000 cedis in a year.