Does your money run out as soon as you receive your salary? If you adopt the 50-30-20 budget scheme, your bank account will not remain empty.

Does your bank account become empty as soon as you receive your salary every month? Adopt the 50-30-20 budget rule and maintain a balance between expenses and savings. This formula will help you systematically manage your income.

If your account becomes empty within a few days of receiving your salary every month, then the 50-30-20 rule can prove to be an effective method. This rule says that you should spend 50% of your total income on essential expenses, such as house rent, electricity bill, ration, and children's fees.

After this, spend 30% on your desires, such as going out, restaurants, gadgets, or shopping. Put the remaining 20% in savings and investments so that a financial backup can be prepared for the future.

Why is this formula easy?

The biggest advantage of this rule is that it is very simple and teaches you the priority of spending. You do not have the hassle of accounting every month, but you have to get into the habit of dividing the money into three parts in advance. This creates a balance between savings and expenses without any pressure.

Some changes are necessary for Indian families

Although this rule is popular in western countries, but in Indian families, where many times the whole family runs on a single salary, it can be difficult to take out 20% savings. Here sometimes instead of 50% essential expenses, there can be 60%. In such a situation, people can also try formulas like 60-20-20 or 55-25-20 as per their convenience.

Effect of discipline

The real benefit of budget planning will be available only when you follow it with discipline. If you find it difficult in the initial months, then start saving with a small amount and gradually increase it. Once you get into the habit of saving 20%, your financial future will be strong.

Important questions on 50-30-20 rule (FAQs)

Question 1- Does the 50-30-20 rule work in India?

Answer- Yes, but due to high expenses in Indian families, some changes may be needed in it.

Question 2- What is the share of savings in this rule?

Answer- It is advisable to put 20% of the total income in savings and investment.

Question 3- What should I do if my salary is very low?

Answer- In such a situation, you can start with 10% savings first, later as the income increases, increase it to 20%.

Question 4- Is it right to spend 30% on desires?

Answer- This is important for lifestyle balance, so that you can also enjoy the things you like.

Question 5- Will this rule also create an emergency fund?

Answer- Yes, you can also use 20% of your savings to create an emergency fund.

(Disclaimer: Here, the advice to invest in stocks is given by the brokerage house. These are not the views of India Employment News. Consult your advisor before investing.)