Ladies, Take Charge Of Your Finances With The 30:30:30:10 Rule Of Saving. Here’s All You Need To Know
We work so hard to earn every single penny but when it comes to saving, it’s not always easy for us beginners. We’re so busy working hard and then playing hard that we forget all about saving for a rainy day or maybe for our financial goals and dreams. This is why it is extremely important to create a bank balance which means one has to get started on budgeting. And most of us struggle with budgeting because we tend to overspend which in turn makes our financial goals seem like a distant dream but this is where the 30:30:30:10 rule of saving comes in. This rule of saving not only helps one plan their budget right but also helps in achieving financial goals. Moreover, it gives you the structure and guidance you need when you’re just starting out on budgeting.
What’s The 30:30:30:10 Rule Of Saving?
The 30:30:30:10 rule of saving is a percentage-based budget that can help you break down your spending as well as your savings. This rule of saving doesn’t mean that one has to be stingy with their spending but it does mean that one has to be frugal and watch their spending habits. This rule of saving can help you strike a balance between saving, investments and spending. If you’re someone who needs to get a grip on your spending habits, this rule is perfect, to begin with.
How To Budget With This Rule Of Saving?
The 30:30:30:10 rule of saving allocates your income in four specific categories – housing, needs, financial goals and wants.
1. The first 30% of your in-hand income should ideally be spent for your housing expenses like rent, home loan EMI, mortgage, household appliances, etc.
2. The second 30% of your income should be spent on your needs and necessary expenses like utilities, groceries, gas, internet, fees, clothes, taxes, etc.
3. The third 30% of your income should be kept aside for your financial goals like paying of debts, savings, investment, health insurance, tax planning, emergency fund, etc.
4. The remaining 10% of your income should be used for your wants and desires like dining out, entertainment, movies, subscriptions, travel, vacations and more.
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But it is essential to remember that this rule of saving is not the best for you if you live in a place where the cost of living is high. In such places, the rents are usually very high making it difficult to save and spend according to the 30:30:30:10 rule of saving.
