Managing Finance - 50-30-20 Rule

This is how you should split up your net income(in hand salary)...

  • 50% of your income should pay your needs(Things you can't live without)

    • Rent
    • Groceries
    • etc.
  • 30% for your wants(good to haves)

    • Travel
    • Eating out
    • Hobbies
  • 20% Savings / Investments / Debt payments

    • Emergency Fund - 6-12 months of living expense.
    • Retirement Planning

PS: I've seen other sources where 30 and 20 are interchanged.

Published on: 6th March, 2021