Balancing Finances
50/30/20 Rule

The 50/30/20 rule can be a valuable tool for
achieving financial diversity, attaining flexible savings objectives,
and nurturing your overall financial well-being.

The Budgeting Principle

known as the 50/30/20 rule, or alternatively, the 50/20/30 budgeting
rule, allocates post-tax income into three distinct categories

30%
Desires
20%
Savings
50%
Necessities

Necessities

These expenses are those that you'd
most likely need to cover, regardless of
your location or employment such as
Rent Food, Transportation,Utilities bill etc.
Allocate 50% towards Necessities

Desires

Non-essential expenditures that elevate
your quality of life. This category includes
items like club memberships, weekend
getaways . dining out with friends , travel
for leisure etc . Limit your personal
discretionary spending to a
maximum of 30%

Savings

This Includes savings & Investment,
retirement funds, Loan repayments,
and emergency reservesā€”financial
priorities that you should contribute.
You can achieve more significant
progress toward a future free of
frustration by allocating as much of
your income as possible to this
category.

Choosing The
Right Budgeting
Method

It depends on various factors, but the
50/30/20 rule is a simple and effective starting
point for your budgeting journey.