There are many people who earn a lot of money, but their money gets spent very fast and their entire budget gets messed up. The biggest reason for this is that they do not know how to manage money properly. If you make the right strategy regarding where to spend how much money, how much to save and invest, then all your needs will be fulfilled and you will also be able to save a good amount for the future. Here know the formula related to money management which can be very helpful in this matter.
50-30-20 Formula
Have you ever heard of the 50-30-20 rule? This rule is very useful in money matters. It means earning-spending-saving. That is, out of the money you earn, about 50 percent of it is spent on the essential expenses of the family. You cannot do anything about this. But you will have to manage the remaining 50 percent.
You can spend 30% of it in fulfilling your hobbies, like you want to watch a movie with your family, want to travel, want to go shopping or any work that is not very important, you just want to do for hobby. Now save the remaining 20% at all costs. Make it a habit that you have to save at least 20% of your earnings.
Invest your savings in these places
- Spend money wisely. Cut down on unnecessary expenses that can be cut down and save money. Invest this savings money.
- To deal with emergency situations, get health insurance, accidental insurance etc. done.
- Take term insurance to secure your family, so that your family can deal with the situation even if you are not there.
- Take a good pension plan because everyone has to face old age. At that time, your money is the biggest strength because you do not have to depend on anyone for your expenses.
- Make it a habit to less invest money.
