Wealthy families often seek financial experts for money management, but anyone can learn to use these systems. A simple budgeting approach can lead to financial freedom, helping avoid the paycheck-to-paycheck cycle that affects many. The 15/65/20 system offers a path to lasting financial stability, emphasizing savings, essentials, and discretionary spending.

The 15/65/20 system divides income into savings, essentials, and discretionary spending categories, with a focus on saving first. Warren Buffett’s advice of saving before spending rings true for long-term financial security. Start by allocating 15% of income to savings, then limit essential expenses to 65%, and allocate the remaining 20% to guilt-free spending.

Adjustments may be necessary based on personal circumstances. Lower-income families may struggle to keep essential spending at 65% due to high housing and food costs. Temporary reductions in discretionary spending may be needed to cover essentials until income improves. Even small progress can lead to significant gains over time with the 15/65/20 framework.

It’s important to note that the 15/65/20 system is not one-size-fits-all. Personal situations may require modifications, such as focusing on paying off debt before investing or adjusting essential spending based on income levels. The key is to make gradual improvements towards financial stability using this flexible guideline.

Read more at Yahoo Finance: Do you manage your money like the top 1%? How to unlock the magical ‘15/65/20’ system whether you make $50K or $500K