30/30/40 - the budget rule that'll help you better allocate your monthly income

It's not about how much you earn, it's about how you use it.

Certified financial planner Paul Roelofse says 30/30/40 is the ideal spending formula to help South African households get their finances in order.

He explains how the 30/30/40 rule works and how to allocate your income wisely after tax.

It's a very simple idea on how one could and should allocate your income.

Paul Roelofse, Certified financial planner
  • 30% allocated to life-changing events and provisions

This includes life insurance, pensions funds and saving for the future. Putting this money away can give you peace of mind, he advises.

  • 30% allocated to car loans, debt, credit cards etc.

Roelofse says debt exposure for any family should not exceed 30% of the household income. Paying this money off can be the hardest part. The expert says this percentage should be a target that all families work towards.

  • 40% allocated to the rest of your living expenses.

This includes groceries, education and other monthly expenses, Roelofse explains.

Listen to the expert financial advice for more:


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