India money management rules means it is the process of planning, saving, and spending money. It can also refer to the management of an individual’s or group’s capital.Here 8 rules of money management in india
1.80/20 Budgeting Rule
2.50/30/20 Rule Of Budgeting
3.75/15/10 Budgeting Rule
4.70/20/10 Budgeting Rule
5.6 JARS System of money Management
1.80/20 Budgeting Rule:-
By following the 80/20 rule,you can create a well-rounded financial plan that covers your needs,prepares you for the future ,and lets you enjoy the present.Implementing
this strategy can help you manage your money more effective ,reduce financial stress ,and ultimately live like the top 1%.So take control of your finance today and start applying
the 80/20 rule to acheive financial freedom and peace of mind.
1.80%:Spend Account
The 80% allocated to stress -free spending allow you to enjoy life without feeling guilty about your expenses.This Part of your budget can be used for activities that bring you
joy and relaxation ,such as entertainment,restaurant, shopping,gym,hobbies,vacation,clothing,housing/rent,food ,inurance,groceries, healthcare,utilities or medical.By setting
aside money specifically for leisure,you can including in your interest without compromising your financial stability.This balance between saving and spending is key to maintaining
a healthy and happy lifestyle.For example:-
If you earn 1 lakh
you can allocated 80,000/-(Spend Account)
or
you can allocated 20,000/-(Save and Invest Account)
2.20%: Save and Invest Account
The 80% allocated to stress -free spending allow you to enjoy life without feeling guilty about your expenses.This Part of your budget can be used for activities that bring you
joy and relaxation ,such as entertainment,restaurant, shopping,gym,hobbies,vacation,clothing,housing/rent,food ,inurance,groceries, healthcare,utilities or medical.By setting
aside money specifically for leisure,you can including in your interest without compromising your financial stability.This balance between saving and spending is key to maintaining
a healthy and happy lifestyle
If you earn 1lakh
you can allocated 20,000/-(Save and Invest Account)
or
you can allocated 80,000/-(Spend Account)
2.50/30/20 Rule Of Budgeting:-
Managing your money like the top 1% might sound complicated ,but it does not have to be .In this blog ,we can explain the 50/30/20 rule of money management ,
a straightforward and affective strategy that can help you take control of your finances.The rule breaks down your income into three main categories :50 % for
needs,30% for wants and 20% invest and saving.
1.50%:Needs
The 50% allocated to needs .This portion of your income should cover essential expenses such as rent or housing,food,trasportation,insurance,groceries,hea
lthcare,utilities or medical.By keeping track of these necessary costs,you can ensure that your basic needs are met without overspending.Budgeting for these
essentials helps you maintain a stable financial foundation ,which is crucial for long -term financial health.
For examples.If you earn 1 lakh
you can allocated 50,000/-(Needs)
or
you can allocated 30,000/-(Wants)
and 20,000/- (Invest or saving)
2.30%:Wants
The 30% allocated to stress -free spending allow you to enjoy life without feeling guilty about your expenses.This Part of your budget can be used for activities that bring you
joy and relaxation ,such as entertainment,restaurant, shopping,gym,hobbies,vacation,clothing,housing/rent,food ,inurance,groceries, healthcare,utilities or medical.By setting
aside money specifically for leisure,you can including in your interest without compromising your financial stability.This balance between saving and spending is key to maintaining
a healthy and happy lifestyle.For example:-
If you earn 1 lakh
you can allocated 50,000/-(Needs)
or
you can allocated 30,000/-(Wants)
and 20,000/- (Invest or saving)
3.20%:Saving and Invest
The 20 % of allocated saving and investing of your income such as emergency fund,retirement,education fund,marrige fun,short term fund or passive income.within this category ,its wise to set aside 3-5% as an emergency fund .This fund facts as a financial safety
net ,protecting you from unexpected expenses like medical emergencies or urgent home repair.The remaining portion of this 10% should be invest in reliable option
such as index funds,which offer a balanced and diversified approach to growing your wealth over time.smart investing can help you build a secure financial future
and achive your long term goals.For example
.For example:-
f you earn 1 lakh
you can allocated 50,000/-(Needs)
or
you can allocated 30,000/-(Wants)
and 20,000/- (Invest or saving)
3.75/15/10 Budgeting Rule:-
By following the 75/15/10 rule,you can create a well-rounded financial plan that covers your needs,prepares you for the future ,and lets you enjoy the present.Implementing
this strategy can help you manage your money more effective ,reduce financial stress ,and ultimately live like the top 1%.So take control of your finance today and start applying
the 80/20 rule to acheive financial freedom and peace of mind.
1.75%:For Needs
The 75% allocated to needs .This portion of your income should cover essential expenses such as rent or housing,food,trasportation,insurance,groceries,hea
lthcare,utilities or medical.By keeping track of these necessary costs,you can ensure that your basic needs are met without overspending.Budgeting for these
essentials helps you maintain a stable financial foundation ,which is crucial for long -term financial health.For example
if you earn 1 lakh
you can allocated 75,000/-(Needs)
or
you can allocated 15,000/-(Wants)
and 10,000/- (Invest or saving)
2.15%:For stress -free spending
The 15% allocated to stress -free spending allow you to enjoy life without feeling guilty about your expenses.This Part of your budget can be used for activities that bring you
joy and relaxation ,such as entertainment,restaurant, shopping,gym,hobbies,vacation,clothing,housing/rent,food ,inurance,groceries, healthcare,utilities or medical.By setting
aside money specifically for leisure,you can including in your interest without compromising your financial stability.This balance between saving and spending is key to maintaining
a healthy and happy lifestyle.For example
if you earn 1 lakh
you can allocated 75,000/-(Needs)
or
you can allocated 15,000/-(Wants)
and 10,000/- (Invest or saving)
3.10%:For savings and Investment
The 10 % of allocated saving and investing of your income.within this category ,its wise to set aside 3-5% as an emergency fund .This fund facts as a financial safety
net ,protecting you from unexpected expenses like medical emergencies or urgent home repair.The remaining portion of this 10% should be invest in reliable option
such as index funds,which offer a balanced and diversified approach to growing your wealth over time.smart investing can help you build a secure financial future
and achive your long term goals.For example
if you earn 1 lakh
you can allocated 75,000/-(Needs)
or
you can allocated 15,000/-(Wants)
and 10,000/- (Invest or saving)
4.70/20/10 Budgeting Rule:-
By following the 70/20/20 rule,you can create a well-rounded financial plan that covers your needs,prepares you for the future ,and lets you enjoy the present.Implementing
this strategy can help you manage your money more effective ,reduce financial stress ,and ultimately live like the top 1%.So take control of your finance today and start applying
the 70/20/10 rule to acheive financial freedom and peace of mind.
1.70%:Living expenses
The 70% allocated to Living .This portion of your income should cover essential expenses such as rent or housing,food,trasportation,insurance,groceries,hea
lthcare,utilities or medical.By keeping track of these necessary costs,you can ensure that your basic needs are met without overspending.Budgeting for these
essentials helps you maintain a stable financial foundation ,which is crucial for long -term financial health.For example
if you earn 1 lakh
you can allocated70,000 /-(Living expenses)
or
you can allocated 20,000/-(Saving)
and 10,000/- (other goals)
2.20%:Saving
The 20 % of allocated saving and investing of your income such as emergency fund,future expenses(sinking fund),retirement fund),education fund,marrige fun,short term fund or passive income.within this category ,its wise to set aside 3-5% as an emergency fund .This fund facts as a financial safety
net ,protecting you from unexpected expenses like medical emergencies or urgent home repair.The remaining portion of this 10% should be invest in reliable option
such as index funds,which offer a balanced and diversified approach to growing your wealth over time.smart investing can help you build a secure financial future
and achive your long term goals.For example
if you earn 1 lakh
you can allocated70,000 /-(Living expenses)
or
you can allocated 20,000/-(Saving)
and 10,000/- (other goals)
3.10%:Other goals or debt payoff
The 10% of allocated Other goals or payoff .This portion of your income should cover essential expenses such as charity ,self education ,passive capital ,compunding
can create wonder for you active investment will at start it will not very significant ,but years on years it will keep accumulating ,and years later it will become a huge amount.
For example:
if you earn 1 lakh
you can allocated70,000 /-(Living expenses)
or
you can allocated 20,000/-(Saving)
and 10,000/- (other goals)
5.6 JARS System of money Management:-Managing your money like the top 1% might sound complicated ,but it does not have to be .In this blog ,we can explain 6 JARS System of Money Management ,
a straightforward and affective strategy that can help you take control of your finances.The rule breaks down your income into three main categories :55 % for
Necessity Account,10% for Play, 10% for Financial freedom account,10% for Education Account,10% for long term saving for spending account and 5% for give account.
1.55%:Necessity Account
The 55% allocated to Necessity Account .This portion of your income should cover essential expenses such as rent or housing,food,trasportation,insurance,groceries,hea
lthcare,utilities or medical.By keeping track of these necessary costs,you can ensure that your basic needs are met without overspending.Budgeting for these
essentials helps you maintain a stable financial foundation ,which is crucial for long -term financial health.For example
if you earn 1 lakh
you can allocated 55,000 /-(Necessity Account)
or
you can allocated 10,000/-(Play Account)
or
allocated 5,000/-(Give Account)
or
allocated 10,000/-(Financial freedomdom Account)
or
allocated 10,000(Education Account)
or
allocated 10,000(Long term saving account)
2.10%:For Play Account
The 10% allocated to Play Account.Its important to occasionally indulde yourself with a nice message ,some new cloths and fancy dinner.Make sure you use up the money
from this jar at least every few months.This allows you to spend without guilt and to also gradually improve your standard of living as your income increase.
For example:
if you earn 1 lakh
you can allocated 55,000 /-(Necessity Account)
or
you can allocated 10,000/-(Play Account)
or
allocated 5,000/-(Give Account)
or
allocated 10,000/-(Financial freedomdom Account)
or
allocated 10,000(Education Account)
or
allocated 10,000(Long term saving account)
3.5%:Give Account
The 5% allocated to Others people Help Account..This portion of your income should cover essential expenses such as Charity.Beside the feel good factors of helping others,
giving away part of your income also helps you to sub-consciously develop the wealth mentality that you have more than engough to give away.For example
if you earn 1 lakh
you can allocated 55,000 /-(Necessity Account)
or
you can allocated 10,000/-(Play Account)
or
allocated 5,000/-(Give Account)
or
allocated 10,000/-(Financial freedomdom Account)
or
allocated 10,000(Education Account)
or
allocated 10,000(Long term saving account)
4.10%:Financial Freedom Account
Financial freedom refers to the first and most important of your life.The 10% of allocated financial Freedom Accuont.This portion of your income should cover essential expenses such as Financial Freedom Account
Create a financial freedom jar account and deposit something into it daily and however small.The idea is to keep financial management top of mind and a daily commitment
made towards your financial freedom. For exmaple
if you earn 1 lakh
you can allocated 55,000 /-(Necessity Account)
or
you can allocated 10,000/-(Play Account)
or
allocated 5,000/-(Give Account)
or
allocated 10,000/-(Financial freedomdom Account)
or
allocated 10,000(Education Account)
or
allocated 10,000(Long term saving account)
5.10%:Education Account
The 10% allocated to Education Account.This portion of your income should cover essential expenses such as books,courses and seminars.The More knowledge and skills
you aquire ,the greater your earning capacity.And the more you earn ,the more you need to learn.For example if you earn 1lakh
you can allocated 55,000 /-(Necessity Account)
or
you can allocated 10,000/-(Play Account)
or
allocated 5,000/-(Give Account)
or
allocated 10,000/-(Financial freedomdom Account)
or
allocated 10,000(Education Account)
or
allocated 10,000(Long term saving account)
6.10%: For Long Term saving account
The 10 % of allocated saving and investing of your income such as emergency fund,future expenses(sinking fund),retirement fund),education fund,marrige fun,short term fund or passive income.within this category ,its wise to set aside 3-5% as an emergency fund .This fund facts as a financial safety
net ,protecting you from unexpected expenses like medical emergencies or urgent home repair.The remaining portion of this 10% should be invest in reliable option
such as index funds,which offer a balanced and diversified approach to growing your wealth over time.smart investing can help you build a secure financial future
and achive your long term goals.For example
if you earn 1 lakh
you can allocated 55,000 /-(Necessity Account)
or
you can allocated 10,000/-(Play Account)
or
allocated 5,000/-(Give Account)
or
allocated 10,000/-(Financial freedomdom Account)
or
allocated 10,000(Education Account)
or
allocated 10,000(Long term saving account)
Frequently Asked Question
What is the rule for money management?
According to this rule, you must categorise your after-tax income into three broad categories: 50% for your needs, 30% for your wants and 20% for your savings. This way, you set aside a fixed amount from your income for each of the categories.
Conclusion
Money management mean stress -free spending allow you to enjoy life without feeling guilty about your expenses.This Part of your budget can be used for activities that bring you
joy and relaxation ,such as entertainment,restaurant, shopping,gym,hobbies,vacation,clothing,housing/rent,food ,inurance,groceries, healthcare,utilities or medical.By setting
aside money specifically for leisure,you can including in your interest without compromising your financial stability.This balance between saving and spending is key to maintaining
a healthy and happy lifestyle.