Budget Calculation: Whenever we take on a job, it brings along responsibilities. We attempt to support our parents with money. In addition to this, we also aim to conserve as much as we can. However, adequate planning is essential for this. In addition to planning, budgeting and discipline are also crucial elements. We will assist you in achieving financial strength and creating an appropriate budget.
While numerous methods exist for creating a financial budget, the most well-known of these methods is the 50-30-20 formula. In this equation, you split your income into three sections. The equation comprises 50% allocated for expenses, 30% designated for needs, and 20% set aside for savings. This formula assists in handling expenditures as well as savings. In addition to this, it also aids in reaching various financial objectives.
Try to maintain 50-30-20 rule
For instance, a girl makes Rs 50,000 each month. From this, she transfers Rs 10,000 each month to her parents. She provides Rs 10,000 from her earnings to her parents monthly. Following this, her overall salary amounts to Rs 40,000. As per the 50-30-20 rule, she needs to allocate 50 percent of her monthly income, which amounts to Rs 20,000. This cost comprises PG rent, meals, electricity bill, etc.
Now calculate the remaining 50%
Now split the leftover 50% of the salary into two sections. Allocate 30% of the remaining salary, which amounts to Rs 12,000, for essential needs. By necessities, we refer to lifestyle expenses like gym memberships or workshops. You should aim to save a portion from these expenses too, which can aid in achieving small goals like traveling or purchasing high-end brand clothing and smartphones. Now set aside the remaining 20 percent, which is Rs 8,000. In addition to your savings and investments, it’s important to allocate a portion of your income to an emergency fund each month, for unforeseen circumstances. In addition to this, it is advisable to invest a certain amount to obtain returns.