Categories: Women Finances


Are you just stepping into the beautiful zone of life called ‘adulthood’? Just on the cusp of getting your own life together.

Or did you take on new responsibilities around the house because of a new promotion?

Either way, you need a budget or outline one to get the hang of your finances. Gone are the days of spending without thinking.

Enters the 50 30 20 budget rule.

Even a cursory look at this division of money will help you in the long run. Additionally, it is an excellent tool for women who have just landed jobs and are finding it difficult to stop themselves from buying the entire world.

So, let’s dive in.

50% on Essentials – 50 30 20 Budget Rule

The 50 30 20 Budgeting Rule: 50% for Essentials

The 50 30 20 Budgeting Rule: 50% for Essentials

Half of your income is set for the essentials: housing, food, transportation, utility bills and any bills that are of a recurring nature. The idea is to maintain the percentage by managing the actual money spent.

So, if your monthly income is Rs. 100k, you would be spending Rs. 50k on essential items.

Your exact spending values will change with how you value individual expenses. For some of you, lodging might take precedence, while transportation may be important for others. If you are living with your parents, you will be saving a large sum.

30% on Personal – 50 30 20 Budget Rule

The 50 30 20 Budgeting Rule: 30% for Personals

The 50 30 20 Budgeting Rule: 30% for Personals

This is the amount you can spend to enhance your lifestyle after saving. Our modern society has luxuries that have taken on a mandatory status. Spending on them is entirely discretionary; some can be modified to fit your splurging limits.

For an income of Rs. 100k, this account would hold Rs. 30k. You can spend on a vacation or gym membership to keep healthy. You can also include clothing, make-up, dining-out and entertainment expenditures in this account.

20% on Savings – 50 30 20 Budget Rule

The 50 30 20 Budgeting Rule: 20% for Savings

The 50 30 20 Budgeting Rule: 20% for Savings

These funds are for retirement and emergencies. If your company provides you a savings plan, that’s great news. But if they aren’t, consider investing in an insurance plan or a retirement fund, which these funds will help start.

Returning to our previous example, an income of Rs.100k will give you savings of Rs.20k per month.

Be warned. Most women feel the urge to use these funds when their essentials quota runs out. Remember, this is NOT a replacement for everyday spending; it is only for rainy days.

Making the 50 30 20 Budget Rule Work

The 50 30 20 budget is not set in stone. It is a framework to help you establish healthy spending habits. Try to be flexible when working with this rule. Having a little leeway is fine as long as it is occasional.

Figure out what your budget looks like and keep track of it. Once you have a template of your spending routine, simplify it into Essential, Savings and Personal to arrive at your current percentages.

Now, all you need to do is modify the percentages to the 50 30 20 rule!


About the Author

Uroosa Kanwal is a seasoned blogger and writer. She writes on finance and shares tips for women on how to become more financially mindful and aware.

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