Nationwide Building Society reveals savings 'rule' that could earn you £1,500

In the correspondence, Nationwide acknowledges the financial pressures that come with this time of year.

"It's that time of year again. There's often a lot going on, which can make it tempting to spend more than you meant to," the newsletter states.

The building society is urging customers to review their budgeting tips to help maintain control of their finances and identify when they can afford "those little extras."

Nationwide's guidance emphasises the importance of creating personalised budget plans tailored to individual circumstances.

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The building society suggests these plans should help customers determine their spending priorities and identify areas where they can reduce expenses.

"Doing this can keep you enjoying the things you love whilst living within your means," Nationwide explains in their guidance.

The emphasis is on creating a sustainable approach to managing finances that allows for both essential expenses and enjoyable activities.

At the heart of Nationwide's financial guidance is the 50-30-20 rule for budget planning.

"The 50-30-20 rule is great way to plan out your spending," the building society explains in their newsletter.

Under this approach, customers are advised to allocate 50 per cent of their income to essential expenses and fixed outgoings.

A further 30 per cent should be dedicated to "wants" - covering day-to-day spending and leisure activities.

The remaining 20 per cent is recommended for savings or debt management, which could include "paying more than your minimum payments or putting money into savings account, pot, ISA or investment."

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This structured approach aims to help customers maintain a clear overview of their monthly expenditure while ensuring a balance between necessities and discretionary spending.

To illustrate this budgeting approach, Nationwide provided a practical example using a monthly income of £1,500 after tax and deductions.

According to their breakdown, this would mean allocating £750 to needs, £450 to wants, and £300 to savings or debt payments.

However, the building society emphasises that this rule should be viewed with flexibility.

Nationwide stated that the 50-30-20 rule is "just an example" and customers can "split in any way to meet your needs".