The 50/30/20 budget

A budget is a plan for your money before you spend it. The 50/30/20 rule is an easy starting point.

The split

• 50% needs: rent, food, bills, transport.
• 30% wants: eating out, shopping, entertainment.
• 20% savings and investing: emergency fund, goals, SIPs.

Pay yourself first

Move your 20% to savings the day money arrives, not at the end of the month. What is left is what you can spend.

Adjust to your life

In expensive cities needs may take 60%. That is fine, but try to keep savings at least 10–20%. The rule is a guide, not a law.

Track for one month

Write down every expense for 30 days. Most people are surprised by how much small daily spends add up.