{"id":32961,"date":"2025-07-30T08:11:11","date_gmt":"2025-07-30T08:11:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/32961\/"},"modified":"2025-07-30T08:11:11","modified_gmt":"2025-07-30T08:11:11","slug":"the-50-40-10-rule-that-helps-people-get-out-of-debt-explained","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/32961\/","title":{"rendered":"The 50\/40\/10 rule that helps people get out of debt, explained"},"content":{"rendered":"

\"ScaleUp<\/p>\n

However, a simple rule of ratios could be the key to paying off debts and regaining control over your money.<\/p>\n

Often, the hardest first step is looking at the problem head-on and taking action. Here\u2019s one way to start today.<\/p>\n

What is the 50\/40\/10 rule?<\/p>\n

The rule itself is simple. Split your income into ratios: 50 per cent on your essentials, meaning rent, bills, and everyday living expenses like food.<\/p>\n

40 per cent goes on paying off debts, and the final 10 per cent goes on everything else. That might be one-off expenses, new clothes, eating out, or putting money aside for savings.<\/p>\n

As a practical example, if your take-home monthly income is \u00a32,400 (the average take home monthly pay according to Salary Calculator UK<\/a>), that means you should spend \u00a31,200 on essentials, \u00a3960 on debt, and \u00a3240 on everything else.<\/p>\n

Of course, having that rule in your head is easier than putting into practice, especially if you\u2019re only just building up healthy money habits now.<\/p>\n

The best way to cut unnecessary spending out of your budget (which you might need to meet those ratios) is to carefully go through your monthly bank statements.<\/p>\n

Are there any doubled subscriptions? Are they direct debits for streaming services or other products that you don\u2019t use or no longer need?<\/p>\n

Cut out what you don\u2019t absolutely need and focus your funds on paying off the debt.<\/p>\n

In terms of what debts to focus on first, if you have multiple types, there are two schools of thought: snowball versus avalanche.<\/p>\n

The snowball method prioritises paying off the smallest debts first, regardless of the interest rate, to offer fast positive wins and keep up motivation.<\/p>\n

On the other hand, the avalanche method focuses on the debts with the highest interest rates, reducing the amount of interest you\u2019ll pay long-term.<\/p>\n

While the avalanche method will likely save you the most money, the snowball method can work well for people who need momentum to keep them focused.<\/p>\n","protected":false},"excerpt":{"rendered":"However, a simple rule of ratios could be the key to paying off debts and regaining control over…\n","protected":false},"author":2,"featured_media":32962,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[1340,84,460,4176,4174,4175,8666,56,54,55],"class_list":["post-32961","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-banking","tag-business","tag-debt","tag-finance","tag-personal-finance","tag-personalfinance","tag-saving","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/32961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=32961"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/32961\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/32962"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=32961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=32961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=32961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}