How Much Should You Save? Kenneth Ko Breaks Down Smart Budgeting Rules in WalletHub

Kenneth Ko, Department Chair of Decision Sciences, Information Systems and Technology Management & Strategy, and Professor of Decision Sciences at Pepperdine Graziadio Business School, recently contributed his financial expertise to WalletHub, offering insight into how percentage-based budgeting strategies can help individuals better manage their money.

In the feature, Ko discussed popular budgeting frameworks such as the 50/30/20 and 70/20/10 rules, which divide income into categories for necessities, discretionary spending, savings, and debt. These approaches, he explained, can provide helpful structure and discipline, particularly for those looking to gain control over their finances.

Ko emphasized that while percentage-based budgeting can be highly effective, no single method works for everyone. "Whether it is the most effective approach depends on several factors, including state of wealth, personality, and life stage," he noted, adding that budget percentages should evolve as income levels, lifestyle preferences, and personal circumstances change.

According to Ko, younger individuals, those seeking stronger financial discipline, and people with modest incomes tend to benefit most from these budgeting strategies. The simplicity of percentage-based rules can make them easier to follow and sustain over time.

When it comes to allocating income, Ko advised starting with essentials. By first identifying the true cost of necessities, individuals can then make more intentional decisions about discretionary spending and savings based on their goals and values.

Ko’s perspective reinforces the importance of flexible, personalized budgeting approaches that balance structure with adaptability, helping individuals build healthier financial habits over the long term.

Read the full article here.