Some North Carolinians say TikTok's 70-20-10 budget rule falls short in today's economy
RALEIGH, N.C. (WTVD) -- It's a savings hack that's supposed to help people spend and save wisely. It's called the 70-20-10 budget rule, and it's gaining traction on TikTok.
Under the formula, 70% of monthly income goes toward essential expenses such as rent, gas, groceries, insurance and utilities. Another 20% is set aside for investing and saving. The remaining 10% is reserved for guilt free spending, like meeting friends or going out to dinner.
The budget trend has thousands of people searching for it online. But in real life, some say sticking to it is difficult.
Haley Hall said rising costs make it tough to save anything at all.
"It's hard to budget yourself some fun money when all the baselines are so expensive that you can't handle emergencies along with it," said Hall.
She said her financial situation leaves little room to build a cushion.
"I'm someone who works for the state government just trying to scrape by. It feels like I'm not actually able to build any sort of meaningful savings right now," she said.
For the TikTok budget rule to work, Hall said she would have to cut back in other areas -- something she said feels unrealistic.
Hall said for the TikTok trend to work for her, in this kind of economy, with inflation she would need to cut back in other areas.
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"It's really unfortunate because then it feels like the question becomes whether you're actually enjoying life or just trying to scrape by," she said.
We took the 70-20-10 rule to Dionne Selby, branch manager of Self-Help Credit Union in the Beacon Point of Raleigh.
"I do think that right now a lot of individuals are really, really strapped for that type of formula," Selby said. "It doesn't mean that the formula doesn't still apply. It may not be 10%. Maybe it's more like 2 or 3%."
Selby said even small amounts make a difference, and the encouragement to save is still valuable.
"Twenty dollars is still a reasonable amount to save and to invest," she said. "You can do things as far as setting up funds transfers where you can take that $20 and still put it in a savings account and possibly even earn money on those savings."
She added that Self Help offers free financial coaching to help people review their budgets.
"We need you to come with at least $5 to open an account," Shelby said. "But then we just start with a free credit report, and then we go through your credit report and actually let you know what's going on with your credit...We will have that one-on-one conversation with you and also give you an action plan if there are some things that you need to work on."
