I know you are thinking that what is the Management of Income ? Well, It is nothing but bifurcation of Income in the category - Needs, Wants and Savings. We all should allocate our hard earned Income for various kind of expenses.
The sequence of Income allocation is said to be Needs, Wants and Saving in 50:30:20 Ratio. For instance, if you earn Rs. 100 in a month then you should bifurcate Rs. 50 for your day to day Needs, Rs. 30 for your wants which might include Foreign tour, Expensive phone or Car, etc and Rs. 20 to met future contingencies.
Many of us might hear the rule of 50:30:20 earlier but we were not able to implement the same with our income. For implementing, I would suggest the sequence should be Saving, Needs and Wants.
We generally spend most part of our Income on the Needs and Wants inappropriately and later we used to see no amount remaining for Savings in the Banks. Hence, we should first allocate 20% of the income for the savings and it could be done in either way such as Mutual Funds, Shares, Gold (Physical or Digital), PPF, NPS, etc. After saving the desired amount, We should look forward towards our Needs without which we cannot survive such as Grocery, Rent/Loan EMI, Child School Fee, etc and Lastly we should set a part of Income for our Wants such as Expensive Phone, Diamond Ring, etc.
We can conclude that Saving is as essential as Needs and we should manage our hard earned money very wisely.
Happy Learning !!!
The sequence of Income allocation is said to be Needs, Wants and Saving in 50:30:20 Ratio. For instance, if you earn Rs. 100 in a month then you should bifurcate Rs. 50 for your day to day Needs, Rs. 30 for your wants which might include Foreign tour, Expensive phone or Car, etc and Rs. 20 to met future contingencies.
Many of us might hear the rule of 50:30:20 earlier but we were not able to implement the same with our income. For implementing, I would suggest the sequence should be Saving, Needs and Wants.
We generally spend most part of our Income on the Needs and Wants inappropriately and later we used to see no amount remaining for Savings in the Banks. Hence, we should first allocate 20% of the income for the savings and it could be done in either way such as Mutual Funds, Shares, Gold (Physical or Digital), PPF, NPS, etc. After saving the desired amount, We should look forward towards our Needs without which we cannot survive such as Grocery, Rent/Loan EMI, Child School Fee, etc and Lastly we should set a part of Income for our Wants such as Expensive Phone, Diamond Ring, etc.
We can conclude that Saving is as essential as Needs and we should manage our hard earned money very wisely.
Happy Learning !!!
Comments