{"id":5177,"date":"2022-08-10T11:26:08","date_gmt":"2022-08-10T11:26:08","guid":{"rendered":"https:\/\/rakshithpai.com\/?p=5177"},"modified":"2023-01-19T07:33:20","modified_gmt":"2023-01-19T07:33:20","slug":"50-30-20-budgeting-rule","status":"publish","type":"post","link":"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/","title":{"rendered":"The 50\/30\/20 Rule of Budgeting. Its Features &#038; Importance Explained:"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-662d1dc9318d4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\" style='display:none' id=\"ez-toc-cssicon-toggle-item-662d1dc9318d4\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#What_is_the_503020_Rule_of_Budgeting\" title=\"What is the 50\/30\/20 Rule of Budgeting?\">What is the 50\/30\/20 Rule of Budgeting?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Origin_of_503020_Budget_Rule\" title=\"Origin of 50\/30\/20 Budget Rule:\">Origin of 50\/30\/20 Budget Rule:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#What_Does_the_Budgeting_Rule_of_503020_say\" title=\"What Does the Budgeting Rule of 50\/30\/20 say?&nbsp;\">What Does the Budgeting Rule of 50\/30\/20 say?&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#50_of_your_Income_%E2%80%93_Basic_Needs\" title=\"50% of your Income &#8211; Basic Needs\">50% of your Income &#8211; Basic Needs<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Need-Based_Expenditure_includes\" title=\"Need-Based Expenditure includes:\">Need-Based Expenditure includes:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#30_of_your_Income_%E2%80%93_Wants\" title=\"30% of your Income &#8211; Wants\">30% of your Income &#8211; Wants<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Want_Based_Expenditure_includes\" title=\"Want Based Expenditure includes:\">Want Based Expenditure includes:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#20_of_your_Income_%E2%80%93_Savings\" title=\"20% of your Income &#8211; Savings\">20% of your Income &#8211; Savings<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Savings_Based_Investments_include\" title=\"Savings Based Investments include:\">Savings Based Investments include:<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Why_is_a_503020_Budget_Necessary\" title=\"Why is a 50\/30\/20 Budget Necessary?\">Why is a 50\/30\/20 Budget Necessary?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#3_Three_Important_Tips_to_Begin_Budgeting\" title=\"3 (Three) Important Tips to Begin Budgeting:\">3 (Three) Important Tips to Begin Budgeting:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Know_What_you_Earn\" title=\"Know What you Earn\">Know What you Earn<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Allocate_you_Expenses\" title=\"Allocate you Expenses\">Allocate you Expenses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Spreadsheet\" title=\"Spreadsheet\">Spreadsheet<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Conclusion\" title=\"Conclusion:\">Conclusion:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#For_More_Information_Check_this_Video\" title=\"For More Information, Check this Video:\">For More Information, Check this Video:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/rakshithpai.com\/50-30-20-budgeting-rule\/#Also_read\" title=\"Also read:\">Also read:<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_503020_Rule_of_Budgeting\"><\/span><strong>What is the 50\/30\/20 Rule of Budgeting?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The 50\/30\/20 budgeting rule is a simple guideline for allocating funds among necessities, luxuries, and long-term goals. <\/strong>It&#8217;s not a strict law, but it may serve as a general rule of thumb when it comes to creating a budget.<\/p>\n\n\n\n<p><strong>It&#8217;s a budgeting strategy that emphasizes saving over spending.<\/strong> A good budget may help you figure out how much money you should be spending and on what kinds of things. If you&#8217;re looking to improve your financial health and stability, the 50\/30\/20 rule might be a useful tool.<\/p>\n\n\n\n<div class=\"wp-block-buttons alignwide is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-1 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/zerodha.com\/open-account?c=PR4768\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Zerodha Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<p>We will examine the history of the rule, its operational details, its restrictions, and an example to help illustrate its use. Simply put, we&#8217;ll demonstrate why and how the 50\/30\/20 budgeting guideline works so that you may use it with confidence.<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-wp-embed is-provider-rakshith-pai wp-block-embed-rakshith-pai\"><blockquote class=\"wp-embedded-content\" data-secret=\"pc6WoIu225\"><a href=\"https:\/\/rakshithpai.com\/budgeting-importance\/\">Budgeting and its Importance:<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Budgeting and its Importance:&#8221; &#8212; \" src=\"https:\/\/rakshithpai.com\/budgeting-importance\/embed\/#?secret=ooZyFVsWz5#?secret=pc6WoIu225\" data-secret=\"pc6WoIu225\" width=\"200\" height=\"200\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Origin_of_503020_Budget_Rule\"><\/span><strong>Origin of 50\/30\/20 Budget Rule:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>The &#8220;50\/20\/30 budget rule&#8221; (sometimes written as &#8220;50-30-20&#8221;) is a financial strategy made famous by Senator Elizabeth Warren in her book All Your Worth: The Ultimate Lifetime Money Plan. <\/strong>Wherein, she writes, after taxes, your disposable income should be divided as follows: 50% on necessities, 30% on luxuries, and 20% in savings.<\/p>\n\n\n\n<p><strong>If you have no idea how much money you&#8217;ve spent or where it went, this is the rule for you. <\/strong>The main premise behind this guideline is to split your after-tax income in such a way that all of your necessities, wants, and savings are justified. Let&#8217;s check out what this guideline entails and how you may start using it immediately. In any case, continue reading!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Does_the_Budgeting_Rule_of_503020_say\"><\/span><strong>What Does the Budgeting Rule of 50\/30\/20 say?&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The Budgeting Rule of 50\/30\/20 is divided into 3 parts. As follows;<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"50_of_your_Income_%E2%80%93_Basic_Needs\"><\/span><strong>50% of your Income &#8211; Basic Needs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>To start following this guideline, spend no more than half of your money on what is absolutely necessary. <strong>This number (50%) may seem excessive at first, but it makes a little more sense when you think about everything that fits under this category.<\/strong><\/p>\n\n\n\n<p>No matter where you reside, what you do for a living, or what your goals for the future are, there are some costs that you will virtually always have to cover\u2014your fundamental expenses. These costs, which are almost always incurred, are practically universal.<\/p>\n\n\n\n<div class=\"wp-block-buttons alignwide is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-2 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/zerodha.com\/open-account?c=PR4768\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Zerodha Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Need-Based_Expenditure_includes\"><\/span><strong>Need-Based Expenditure includes:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ol>\n<li>House Rent<\/li>\n\n\n\n<li>Grocery Bills<\/li>\n\n\n\n<li>Electricity, Water &amp; Other amenities<\/li>\n\n\n\n<li>Transportation&nbsp;<\/li>\n\n\n\n<li>Insurance&nbsp;<\/li>\n\n\n\n<li>Mobile Recharge etc.<\/li>\n<\/ol>\n\n\n\n<p>As you can see, these are all basic needs or essentials that one must have to spend on a day-to-day basis. <strong>No one can escape from these expenses. Hence, allocating 50% of your income to your needs will not only give you a sense of lenience but also motivation too when you are able to save money on the 50% spending limit.<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"30_of_your_Income_%E2%80%93_Wants\"><\/span><strong>30% of your Income &#8211; Wants<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>The second group consists of expenditures that improve your quality of life but ultimately add nothing to your budget.<\/strong> A number of economists classify everything in this section as optional. However, many items once considered luxury are now seen as necessities in today&#8217;s society. In the end, it&#8217;s up to you to decide what you want out of life and how much you&#8217;re willing to give up to get it.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Want_Based_Expenditure_includes\"><\/span><strong>Want Based Expenditure includes:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ol>\n<li>Internet Subscription<\/li>\n\n\n\n<li>Movie &amp; Shows<\/li>\n\n\n\n<li>Netflix, Prime Expenses<\/li>\n\n\n\n<li>Dining &amp; Shopping<\/li>\n\n\n\n<li>Weekend Plans etc<\/li>\n<\/ol>\n\n\n\n<p><strong>You alone know which of your expenses are genuinely necessary and which might be classified as &#8220;personal.&#8221; This way no more than half of your money should be spent on necessities, and no more than one-third of your income should be spent on discretionary purchases. <\/strong>Having fewer of these expenses means more money going towards your Savings, Investing &amp; Financial Planning.<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-wp-embed is-provider-rakshith-pai wp-block-embed-rakshith-pai\"><blockquote class=\"wp-embedded-content\" data-secret=\"uiRtvoBQo5\"><a href=\"https:\/\/rakshithpai.com\/budgeting-importance\/\">Budgeting and its Importance:<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Budgeting and its Importance:&#8221; &#8212; \" src=\"https:\/\/rakshithpai.com\/budgeting-importance\/embed\/#?secret=4Gyv4llR7R#?secret=uiRtvoBQo5\" data-secret=\"uiRtvoBQo5\" width=\"200\" height=\"200\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"20_of_your_Income_%E2%80%93_Savings\"><\/span><strong>20% of your Income &#8211; Savings<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Having a savings account will help you weather financial storms caused by either the economy or personal circumstances. <\/strong>Spending your funds wisely should be your first priority. Don&#8217;t place them in investments with stringent lock-in periods and interest rates that can&#8217;t keep up with inflation. You should put your money into investments that can beat inflation and still provide you with quick access to your funds.<\/p>\n\n\n\n<p><strong>The savings bucket is what will get you through tough times in the future while necessities and wants ensure your comfort and well-being in the here and now.<\/strong><\/p>\n\n\n\n<div class=\"wp-block-buttons alignwide is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-3 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/zerodha.com\/open-account?c=PR4768\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Zerodha Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<p>It is recommended that you set aside 20% of your after-tax income for savings and investing purposes (as per the 50-30-20 guideline). Remember that money, unlike necessities and wants, should not be a tertiary concern. Nothing is more important than your money and savings.<\/p>\n\n\n\n<p><strong>The current era has made this money bucket the most crucial one. You can&#8217;t expect to stay in the workforce until you&#8217;re 60 like your parents did, and you also won&#8217;t remain youthful forever. <\/strong>Given the uncertainty of the times, people are increasingly pursuing nontraditional professions and switching occupations often. In spite of all that may go wrong, you should set up a nest egg for retirement and other contingencies.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Savings_Based_Investments_include\"><\/span><strong>Savings Based Investments include:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ol>\n<li>Emergency Fund<\/li>\n\n\n\n<li>Public Provident Fund<\/li>\n\n\n\n<li>National Pension Scheme<\/li>\n\n\n\n<li>Post Office Savings<\/li>\n\n\n\n<li>Mutual Fund Investing etc.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_is_a_503020_Budget_Necessary\"><\/span><strong>Why is a 50\/30\/20 Budget Necessary?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The majority of individuals have a problem with saving money because they overspend.<\/strong> Using the 50\/30\/20 rule of thumb, you can keep track of your spending and savings and learn to live within your means. Cutting back on unnecessary expenditures frees up cash for investments in what really matters in life.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Three_Important_Tips_to_Begin_Budgeting\"><\/span><strong>3 (Three) Important Tips to Begin Budgeting:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Know_What_you_Earn\"><\/span><strong>Know What you Earn<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><strong>You must know exactly how much you earn in a month before you even consider spending.<\/strong> You must know what\u2019s your take-home pay! As soon as you know your income, based on the tax structure,<strong> set aside the tax portion and move it aside. <\/strong>This money (tax) is not yours to spend. So, it shouldn\u2019t come in your 50-30-20 budgeting.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Allocate_you_Expenses\"><\/span><strong>Allocate you Expenses<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Once you know how much you earn, start segregating your income into 3 brackets as the 50-30-20 rule and see where your expenses meet in regards to the rule. <strong>See whether there\u2019s any overflow of expenses in any bracket as mentioned.<\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Spreadsheet\"><\/span><strong>Spreadsheet<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Yes, have a spreadsheet. You can also check money management applications that are available in the play store for free. Use these tools to assess your progress. <strong>With a spreadsheet, we must analyze our spending pattern. We must know where we are spending in excess of the 50-30-20 rule and look for alternatives.<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-wp-embed is-provider-rakshith-pai wp-block-embed-rakshith-pai\"><blockquote class=\"wp-embedded-content\" data-secret=\"xBP2uj6eGq\"><a href=\"https:\/\/rakshithpai.com\/easy-ways-to-save-income-tax\/\">15 Best Ways to Save Income Tax in India:<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;15 Best Ways to Save Income Tax in India:&#8221; &#8212; \" src=\"https:\/\/rakshithpai.com\/easy-ways-to-save-income-tax\/embed\/#?secret=OtWt63hYxD#?secret=xBP2uj6eGq\" data-secret=\"xBP2uj6eGq\" width=\"200\" height=\"200\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The 50\/30\/20 budgeting strategy might be more effective if you first determine the reason you&#8217;re doing it.<\/strong> It&#8217;s similar to having your &#8220;eye on the prize.&#8221; The big picture might serve as a useful reminder to rein in spending when you&#8217;re feeling tempted. First, you need to ask yourself, &#8220;Why am I creating a budget?&#8221; For what purpose do I strive?<\/p>\n\n\n\n<div class=\"wp-block-buttons alignwide is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-4 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/zerodha.com\/open-account?c=PR4768\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Zerodha Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<p><strong>It&#8217;s tough to save because of the frequent occurrence of unplanned costs. The 50-20-30 rule provides a framework for deciding how to allocate after-tax earnings.<\/strong><\/p>\n\n\n\n<p>If they determine that more than 20% of their income is being spent on their desires, they may take steps to limit those outlays and put the extra money toward things like savings for emergencies and retirement.<\/p>\n\n\n\n<p><strong>If you&#8217;re trying to save money for a specific purpose, it might be helpful to put a precise figure on your savings goal so that you can check in on your progress every week, month, or year.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_More_Information_Check_this_Video\"><\/span><strong>For More Information, Check this Video:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"ast-oembed-container \" style=\"height: 100%;\"><iframe loading=\"lazy\" title=\"What is the 50\/30\/20 Rule of Budgeting? How to Budget, Save &amp; Make Money? #money #budgeting #shorts\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/HlAK28VrsII?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<p><strong>Disclaimer:&nbsp;<\/strong>All the information on this website is published in good faith and for general information purposes only.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"also-read\"><span class=\"ez-toc-section\" id=\"Also_read\"><\/span><strong>Also read:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><a href=\"https:\/\/rakshithpai.com\/stock-investing-beginners-tips\/\" target=\"_blank\" rel=\"noreferrer noopener\">15 Stock Investing Tips For Beginners:<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/fixed-deposits-alternatives\/\" target=\"_blank\" rel=\"noreferrer noopener\">7 Investment Options to Earn Better than Fixed Deposit:<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/budgeting-importance\/\" target=\"_blank\" rel=\"noreferrer noopener\">Budgeting and its Importance:<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/invest-20s-wealthy-30s\/\" target=\"_blank\" rel=\"noreferrer noopener\">10 Steps in Your 20s To Become Wealthy by 30s:<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/modern-portfolio-theory\/\" target=\"_blank\" rel=\"noreferrer noopener\">Modern Portfolio Theory &amp; Investment Analysis:<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the 50\/30\/20 Rule of Budgeting? The 50\/30\/20 budgeting rule is a simple guideline for allocating funds among necessities, luxuries, and long-term goals. It&#8217;s not a strict law, but it may serve as a general rule of thumb when it comes to creating a budget. It&#8217;s a budgeting strategy that emphasizes saving over spending. 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