50/30/20 Budgeting Rule: If money management is followed with some rules, then you will be able to manage your income along with investment and lifestyle expenses without any tension. This method is a single mathematical formula.
50/30/20 Budgeting Rule: Often the salaried class faces the problem of the fact that the salary gets exhausted within the next few days. Sometimes they fall short of money for investment, and sometimes they face shortage of money to spend on lifestyle. There is a very technical thing here that the salaried class has complete information about their income and monthly expenses, then how does the matter get worse. Actually, the biggest problem here is that of financial planning and money management. Experts say that if money management is followed with some rules, then along with savings in income, you will also be able to spend on investment and lifestyle expenses without any tension. This method is a single mathematical formula.
Remember the rule of 50+30+20=100
Amit Kumar Nigam, Director of BPN Fincap, says, if you remember simple maths formulas in money management, then you will be able to easily achieve your every target. This simple formula is 50 + 30 + 20 = 100. Now let us understand the 50/30/20 rule in simple words. Suppose monthly income is Rs 100. Where and how much allocation is to be made in this?
- Spending on basic needs – 50 percent
- Investment: 30 percent
- Guilt free spending: 20 percent
Nigam says, the expenditure on basic household needs should not be more than 50 percent of your income. Also always try and follow that if you are earning Rs 100, then you are also investing Rs 30. Apart from this, spend 20 percent of the amount for lifestyle expenses like travel, movies, outings. This way you will not need to adjust or stop any expenses. With this formula, you will be able to achieve different goals in life as well as spend it guilt free.
Keep your investment planning strong
He says, here but keep in mind that never forget to invest. This investment is necessary not only for your children but also to meet other needs of your life. Regarding investment, understand where and how much money is to be kept for what purpose, plan it with the help of a financial advisor on the basis of income, age and risk taking ability.
Read this: Bank Holiday In February 2024: Banks will remain closed for 11 days in 29 days, check holiday list
