There is hardly anyone who does not want to save money for his future, but the problem with employed people is that their salary is spent as soon as it comes. Almost all the money is spent on pre-arranged work, household ration, rent, and some personal expenses, etc. Therefore, employed people face a lot of difficulties in saving. In such a situation, if your salary is spent as soon as it comes and you are not able to save, then you can take the help of the 50-30-20 rule. This will help you save for tomorrow and also meet today's expenses. So let us know what this 50-30-20 rule is. You can know about this in detail further...
First, let us know what is this 50-30-20 rule.
This 50-30-20 rule is for savings which was started by US Senate Elizabeth Warren. In his book 'All Your Worth: The Ultimate Lifetime Money Plan', published in 2006, he wrote that, under this rule, he divided his salary into three parts, which include need, want, and savings.
Understand the first 50
According to Elizabeth in the 50-30-20 rule, 50 means that you should spend 50 percent of your income on things that are very important for you and without them, your work can get stuck. These include house rent, ration, electricity bill, education, EMI health insurance, etc.
Know now 30
In the formula of 50-30-20, 30 percent means that you can spend this percentage of money on your desires, which you can also avoid. But they make you happy. Like shopping, going to watch a movie, eating out, etc.
Focus on the 20 at the end
At the same time, in the 50-30-20 rule, 20 percent means that you should save this much portion of your income. Like- for the future, emergency fund, for children's education, for children's marriage, etc. Hopefully, now you know how you can save under this rule.
(PC: iStock)
