Monthly Budget Planner

What is 50-30-20 Budget Planner?

Monthly Budget Planner

Many of us keep thinking on How to Save Money with Monthly Budget Planner and get rich

Foxstylo.comHi friends in this post I’m going to give you some tips on how to plan our monthly budget

Friends who don’t want to become rich? Everyone wants to be rich right? So what are the important budget rules to be considered to become rich?

Many people think the business is the only way to become rich soon and not with regular income…

But this is wrong..!

Statistics reveal that many rich people are from the salaried class… Yes, it is true..!

The salaried people might have taken 10 to 20 years to become rich but how?

Because they follow financial discipline or budget rules with a good monthly budget planner, they have habits of saving and investing regularly and also make researches to invest in the right place

Let Me Explain the Monthly Budget Planner Rule

Ok now for example when I started my career my personal finance experts advised me to put 50% of my salary in savings & investments… I know you might have also come across such situations

When my salary is only 15k to 20K & I’m not able to fulfill my own expenses so how will I save?

Yes, this is right in every youngster’s life because he or she will be able just to fulfill their basic necessity & in this way, many of us do not even think or start saving habits at all..!

Ok even if we start saving soon after we realize about saving the time would have elapsed to get the benefits of compounding law, so all I like to say here is the early we start investing the early we get the benefits of compounding. This is the Power of Compounding” by which the rich become more & richer by smart investment.

If you start investing at the age of 20 to 25 would give better returns & maybe you retire soon with sufficient wealth that the person starts investing 10 years later than you…

Hence it is very important to have good discipline in saving & investing the money

Now coming to the Monthly Budget Planner Rule the framework for youngsters & experienced people has to be different. Same rules cannot be applied for both, so now let’s see what framework is for youngsters & what framework is for experienced


50/30/20 Budget Rule of Money

Monthly Budget Planner, 50-30-20 Budget Planner

This is the basic rule to divide income on spending 50% on needs and 30% on wants and allocating 20% to savings.

Needs- 50%

Monthly Budget Planner

Needs are the basic necessity for an individual, these include the Basic needs & Bills

Basic needs – Rent/EMI, groceries, transportation, clothes, etc…

Bills – Such as Electricity bill, water bill, gas bill, phone bill & internet bill

Now a day the list of basic necessity has increased with the bills

The basic needs again depend from person to person

The “Needs” category does not include items that are extras, such as Smart TV, Café Coffee Day, Domino, KFC and dining out.

Wants- 30%

Monthly Budget PlannerWants are all the things you spend money on that are not more essential. This includes

Car and Dinner and movies out

Vacation and Expensive Clothes

Consumer Electronics such as expensive Phone, laptop, home theater System

Wants are all those little extras you spend money on that make life more enjoyable and entertaining.

Savings & Investment – 20%

Monthly Budget Planner

This the most important part of the 50/20/30 budget rule. We should allocate 20% income for Savings & Investment. This amount is for Kids higher Education, Retirement, Medical Emergency, kid’s marriage, etc…

 

Some of the money saving tips & where to invest money are

Short Term Investment Plans -> (RD) Recurring Deposit, Stock Market, Mutual Funds &, etc…

Medium Term Investment Plans -> (FD) Fixed Deposits, Debt

Long Investment Plans -> NPS (National Pension Scheme)


Monthly Budget Planner Rules for Beginners

Just think about what is your budget? Let’s say for example your income is 20000

According to the 50-30-20 Rule of Money

Needs-50%

You should allocate 50% of your income, so that will be 10000/Month

Wants-30%

You should allocate 30% of your income, so that will be 6000/Month

Savings & Investment-20%

You should allocate 20% of your income, so that will be 4000/Month


Monthly Budget Planner Budget Rules for Experienced

Here the proportionate of the rule should not be same as youngsters the proportion of the rule should change accordingly in order to focus more on Savings & Investment

Let’s say for Example for approx. 10 years of experience the income would be approx. 40000.

The rule should be the 40-20-40 Rule for Experienced

Needs-40%

You should allocate 40% of your income, so that will be 16000/Month

Wants-20%

You should allocate 20% of your income, so that will be 8000/Month

Savings & Investment-40%

You should allocate 40% of your income, so that will be 16000/Month

First thing is to open a personal account for Savings & Smart Investment and transfer 40% of the income to this account so that you spend the remaining amount of the income on needs & wants

Friends hope this article helped in planning your monthly budget and gave you a brief idea on how to Save & Smartly Invest.

You can find the tips on How to Save Money

Also, suggest you know more about Compound Interest works with Compound Interest Formula

These articles will be more helpful in giving you the ideas on how to save money you and invest the same for double the money in a few years 😉


 

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