What is the 50:30:20 Budget Rule and how does it work?

Publish Date: 10 Mar, 2023 |

The 50:30:20 rule is a way of budgeting in which money can be saved in an easy and effective way. Its basic rule is that you have to divide your salary into three parts first. You have to keep 50 percent of the salary for the things you need, give 30 percent to the things you wish to buy and the remaining 20 percent you have to deposit every month or say its savings. 

50% cost

According to the 50:30:20 rule of budgeting, spend 50 percent of your salary on things you need. This includes your monthly rent, electricity bill, gas bill, transportation expenses. Insurance, loan money and home catering items can come. At the same time, you can try to spend half of your salary to meet all these things or you can put a little restriction on the expenses.

30% cost

You can spend this money on the things of your hobby. Spend on eating out, going out, buying clothes, gym money, entertainment and snacks etc. This rule does not mean at all that you should live according to your wish, so keep money for hobby things also.

20% Savings

Keep 20% of your salary for savings. You can keep them in your bank account and if you cannot keep them in your account, then open a separate savings account whose purpose is only for saving.


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