What is the 50/30/20 Rule? Explained with Real-life Example
What is the 50/30/20 Rule? Explained with Real-Life Example The 50/30/20 rule is a simple and effective budgeting strategy that helps you manage your money wisely. It divides your monthly income into three main categories: Needs (50%) , Wants (30%) , and Savings (20%) . This rule is ideal for beginners, students, or anyone looking for an easy way to take control of their personal finances. 💡 How Does the 50/30/20 Rule Work? 50% - Needs: These are essential expenses you can't avoid. Examples include rent, groceries, utility bills, transportation, insurance, and minimum debt payments. 30% - Wants: These are non-essential expenses that enhance your lifestyle such as dining out, entertainment, shopping, and subscriptions (Netflix, Spotify, etc.). 20% - Savings: This includes investments, emergency fund, debt repayment (extra payments), and long-term savings. 📊 Real-Life Example Let’s say your monthly income is ₹60,000 after taxes. Needs (50%) → ₹30,000: ...