Saving Tips: If you are also facing such a problem, then the first thing to do is to make a budget of expenses according to your salary. To make a monthly budget, you can take help of the 50-30-20 rule. This formula is considered very effective financial planning.
The formula of 50-30-20 rule for managing expenses was given by Elizabeth Warren, who was included in the US Senate and Time Magazine’s 100 most influential people. He told about managing expenses in his book All Your Worth: The Ultimate Lifetime Money Plan. In this he advised that a person should divide his income into three parts.
In Elizabeth Warren’s formula, 50 means that we should spend 50 percent of our income on things that are very important for us. Like household ration, rent, children’s tuition fees, bank loan etc.
Elizabeth Warren told that spend 30 percent of your salary on your desires. However, these are expenses which you can avoid. Under this, watching movies, going to parlor, shopping, eating out or any other hobby is included.
In the book All Your Worth: The Ultimate Lifetime Money Plan, Elizabeth Warren recommends keeping 20 percent of your income for retirement planning, children’s higher education, children’s marriage and emergency fund.
If you do your financial planning keeping these things of Elizabeth Warren in mind and write down the monthly expenses on a copy, then it will help you in saving your money. With this you can also save money more easily.