How 50-30-20 rule helps you meet investment goals
50-30-20 rule of budgeting advocates to devote 20 per cent of income for savings, 50 per cent for important and necessary expenses while 30 per cent for those expenses that are important but not necessary
When you have a regular income, it's important to have a planned way of expenditure too. According to tax and investment experts, one can segregate one's expenses into three categories — expenses that can't be stopped, expenses for savings and expenses that are important but not necessary. On the basis of these three expenses, 50-30-20 rule of budgeting of one's income comes into play where one devotes 20 per cent of its income for savings, 50 per cent for important and necessary expenses while 30 per cent of the income is devoted to those expenses that is important but not necessary. Experts went on to add that if handled properly, this 50-30-20 rule of money helps an earning individual to meet one's all types of investment goals with ease.