Money Saving and Spending Formula: Often the salaried class faces the problem of the fact that the salary gets exhausted within the next few days. Sometimes they fall short of money for investment, and sometimes they face a shortage of money to spend on lifestyle. There is a very technical thing here that the salaried class has complete information about their income and monthly expenses, then how does the matter get worse? Actually, the biggest problem here is that of financial planning and money management. Experts say that if money management is followed with some rules, then along with savings in income, you will also be able to spend on investment and lifestyle expenses without any tension. This method is a single mathematical formula.
If you remember simple Math formulas in money management, then you will be able to easily achieve your every target. This simple formula is 50 + 30 + 20 = 100. Now let us understand the 50/30/20 rule in simple words. Suppose your monthly income is Rs 100. Where and how much allocation is to be made in this?
Spending on basic needs – 50 per cent
Investment: 30 per cent
Guilt-free spending: 20 per cent
The expenditure on basic household needs should not be more than 50 per cent of your income. Also always try and follow that if you are earning Rs 100, then you are also investing Rs 30. Apart from this, spend 20 per cent of the amount on lifestyle expenses like travel, movies, and outings. This way you will not need to adjust or stop any expenses. With this formula, you will be able to achieve different goals in life as well as spend it guilt-free.
Never forget to invest! This investment is necessary not only for your children but also to meet other needs in your life. Regarding investment, understand where and how much money is to be kept for what purpose, and plan it with the help of a financial advisor on the basis of income, age and risk-taking ability.
