50/30/20 Financial Rule of Money Management.
The best rule of money handling is 50/30/20 Financial Rule of Money Management. If you want to grow your wealth and wants to enjoy the financial freedom this rule helps a lot. Lets start discuss about 50/30/20 Financial Rule of Money Management.
Every human want financial freedom but due to less or no knowledge of Money management they didn’t get it and the desire of financial freedom becomes only desire.
Every people have a spending structure of money or we can say that people spend their money in 3 forms
- Desire or wants
- Saving or Debt
Needs: for the living of life, most priorities thing is needs. because you can’t live without it such as grocery, transport, bill payment, health insurances etc. Understand my point of views, things which are most mandatory for living are termed as needs. If your salary is ₹40,000 then needs occupies atleast 50% of your salary. That means ₹20,000 money is spend in the needs fulfillment.
Desire or wants: such as dining out in expensive restaurants, Imported watches for show off, etc. We can say that desire are the things if they are not fulfill there will be no big issue in your life. In the current era maximum people want show-off so they spend 30% of income in desire form. That means ₹12,000 money goes into desire.
Saving or Debt: Remaining 20% money go in either saving or debt clearing, i.e ₹8,000 you can save or clear your credit card bills, pay for recharges, etc.
The whole concept of this rule is to change the spending structure of your income. We know that we spend money in 50/30/20 format but if we change it in form of 50/20/30 then the saving of your income go high. I explain how it is possible.
Only one thing in your expenditure requires a change, the thing is knowledge and difference between wants and needs. Yes, if you not know what is your actual needs and what is your wants you can also get financially freedom. In simple words, if you not know the difference between your needs and wants then there is a 100% chance that every month you will save your money that goes in useless wants fulfillment. Also this is not right because buying an Iphone is not your needs it just your wants.
Before buying any single thing in life first ask question to yourself that can you live without this thing or product, same as IPHONE example. On salary of ₹40,000 the IPHONE purchasing is not a good decision because it hampers your budget. This rule only helps to make financial success of low income people because for them the first thing is to understand the money management. It is the first step of financial freedom .
Sandeep Maheswari always says “Buy the feeling of product not the shop placed area”.
“When you go to a Gucci showroom then you touch the product and feel the feeling of clothes or product. Now try it in your Local market touch the product and try to find same feeling then you definitely purchase good stuff in economic way.”
Same purchasing feeling provides KDB Deals for the person who wants luxury feeling in economic price. You also know the theme of KDB Deals, i.e. “PURCHASING HAPPINESS”.