There are many formulas for saving money, but one formula has been given by US Senator Elizabeth Warren, which is the 50-30-20 rule. In this rule, the salary has to be divided into three parts.
According to Elizabeth Warren, 50 percent of the salary should be spent on essential things. These are the expenses without which you cannot survive. This includes rent, ration, children's fees, utility bills, etc.
The second part of the 50-30-20 formula is 30 percent, which includes those expenses that can be avoided, but by spending on this, you get refreshment and happiness. This includes watching movies, going to the parlor, shopping, eating out, etc.
The third and last part of this is 20 percent, which should be kept for savings according to this rule. This money should be used for planning your retirement, children's higher education, children's marriage, and emergency fund.
Now suppose your salary is 50 thousand rupees, then according to the 50-30-20 formula, 25 thousand rupees should be spent on household needs and 15 thousand rupees should be spent on traveling or say on luxury feel.
After doing all this, you will have 20 percent i.e. 10 thousand rupees left. You should put this money in savings. You can invest this money differently at your convenience.
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