For many people, getting the most out of their hard-earned money can be a challenge. Thankfully, the 50/30/20 rule is here to help! This simple budgeting rule is straightforward, easy to remember, and useful (if you stick to it). According to the rule, you should take 100% of your after-tax income and allocate it in three different ways: 50% for needs, 30% for wants, and 20% for savings. For more on how to use the rule, read on! Needs Half of your money should be put toward necessary expenses: groceries, utility bills, health care expenses, loans, mortgages, and other payments. However, you may need more than 50% of your money to cover your mandatory expenses, and the remaining money should be split between wants and savings as evenly as possible. Your needs could also require less than half of your after-tax income. In this case, use the leftover money to pay down loans and debts so you will have more money to dedicate to savings and wants in the future. Wants What good is life if you can’t enjoy yourself? The rule says you should apply 30% of your after-tax income toward your wants. This portion can be spent on everything from tickets to see your favorite sports teams, a premier BETTER BUDGETING The Benefits of the 50/30/20 Rule
“Jurassic Park”-themed pinball machine, or eating out at a restaurant. However, it should only apply to things you want to spend money on immediately — not long-term investments. Savings The last 20% is the money you save for a rainy day. It can be cash you are saving for a dream vacation, money invested in a 401(k), or simply put into a savings account. Any long-term investment you make will fall into this category. While the 50/30/20 rule is not an exact science, it is worthwhile for budgeting your money responsibly and equitably!
Brilliant Boom, Brutal Bust
BLOCKBUSTER’S FALL FROM FORTUNE
There’s no such thing as a business too big to fail. Once one of the world’s most celebrated enterprises, Blockbuster now stands as a cautionary tale of how greed, a lack of foresight, and an unhealthy dose of hubris can transform a once-proud global phenomenon into a sad relic of a bygone era. Here is a brief overview of the video/DVD rental chain’s meteoric rise and catastrophic fall.
A Blue-and-Yellow Business Blooms Founded in Texas in 1985, Blockbuster Video grew to 800 locations in just three years, making it the country’s most successful video store chain by 1988. Thanks in no small part to its vibrant branding (who of a certain age can ever forget that iconic blue and yellow?), the company boasted more than 9,000 locations worldwide by the early 2000s. Blockbusters were everywhere at the turn of the century, but the company’s fortunes would soon change. The Arrogance Awakens Even at its peak, Blockbuster had plenty of cracks forming in its economic armor. A significant portion of its revenue came from its notorious $1-a-day late fee — a business model built more on penalizing consumers than rewarding them for their patronage. (In 2000 alone, the late-fee scheme generated $800 million in revenue.) Additionally, the company failed to recognize the potential of a rising powerhouse called Netflix. In 2000,
Netflix offered to sell its then-fledgling operation to Blockbuster for $50 million. Instead of seizing the opportunity at such a small investment, Blockbuster looked the other way. According to former Netflix CEO Barry McCarthy, Blockbuster executives “laughed [him] out of the office” — a moment that sealed the brick-and-mortar chain’s fate. From Glory to the Gutter The decade following the ill-fated meeting was far from kind to Blockbuster, which consistently lost money as more of its customer base turned to the provider it had rejected. By the time the company filed for bankruptcy in 2010, it was approximately $1 billion in debt. To add insult to injury, Netflix reached the 20-million-subscriber mark that same year. As of late 2024, the Blockbuster location in Bend, Oregon, remains the world’s last. It’s the subject of a 2020 documentary film called, appropriately enough, ‘The Last Blockbuster.’
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