Every month starts with great expectations, as soon as the salary comes, it seems that now everything will go on comfortably. But even half the month does not pass and the pocket is empty. And then where did the same tension go away? What to do for the remaining days now?
If you also get trapped again and again in a similar situation, then it is time to show understanding. An easy and effective way to deal with this problem is 50/30/20 budget rule. This method will not only keep your expenses under control, but will also help you save for the future.
This is a very simple rule, in which the entire income after your tax is divided into three parts. In which 50% are on necessary things, 30% on desires and 20% for savings and investment. With this rule, you will not only be able to handle your current expenses properly, but will also be able to plan future. Let us understand the calculation of this rule in detail.
All those things come in this part which are very important to run life. Such as household fare, children's fees, electricity-water bills, EMI and daily ration. These are expenses that cannot be deformed. Therefore, it is prudent to spend half of the total income on them. If these expenses are being more than 50%, then you have to make a little change in your living or living ways.
Now let's talk about those things that give happiness to our hearts like eating outside, shopping, going on holidays, watching movies or taking a new mobile. These are not necessary, but make us feel good, but if you start spending more on these things, then both necessary things and savings are affected. Therefore, it would be right to limit this part to 30%.
It is very important to save some money every month, these money is useful during emergency and makes the future safe. Whether it is SIP, FD, or any other investment, you should save at least 20% of your earnings in savings and investment. As your income increases, you can increase this part even more.
