The 50/30/20 rule.
Your simple guide to massive money:
1) The 50/30/20 rule
Every month, split your budget into 3 sections.
• 50% for needs
• 30% for wants
• 20% for savings and debt
For example:
Let’s say you’ve calculated your after-tax income as ₹50,000 per month.
In this case, you’d have:
• ₹25,000 for needs
• #15,000 for wants
• ₹10,000 for savings and debt.
2) Needs
Needs are expenses that you absolutely must keep in your budget no matter what.
These include things like:
• Housing
• Utilities
• bills
• Transportation and health care expenses
3) Wants
Wants are expenses that you choose to spend your money on but that you don’t need to live your life.
This category includes expenses like:
• Vacations
• Dining out
• Shopping trips
• Entertainment
4) Saving & Debt
Save at least 20% of income each month for
• Retirement or long-term savings
• Emergency funds (6-8 months of living expenses)
• Pay your debt sooner.
• Pay high-interest debts first.
5) Budgeting
Create a budget. Track all your money.
Follow the 50/30/20 rules.
You can adjust the 50/30/20 rule if you want to save/Invest more.
A i r a v a t a . . 