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Financial Planning – The 50/30/20 Rule
The 50/30/20 is a golden thumb rule for financial planning of your income earned. It is very important to plan on how you expend your money!
This rule is a guideline to allocate your budget into to three categories :
Allocation of Income :
50% to Needs
Needs are basic necessities and expenses that you cannot live without such as
30% to Wants
Wants refer to desires and wishes which are not necessary for your survival
20% to Savings, Investments and Financial Goals
Savings and Investments help you achieve your Financial Goals and secure your future.
How to apply the 50-30-20 Rule : a step-by-step-guide
- By Drumil Shere