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Dev’s story is the story of every person whose salary ends but does not understand where the money has gone. Then one day the 50 30 20 rule changed his life. Same salary, same job but only by changing the way of distribution of money, his savings increased manifold in 6 months and for the first time his bank balance was not zero.
New Delhi. Dev was 29 years old and had a good job in a multinational company. The earning was decent but the financial situation remained the same every month. The initial enthusiasm of the month would end midway and in the last week the account would be found empty. Dev himself could not understand where the money was going and why there was no saving in his life.
Meanwhile, during lunch break in the office, he met Anuj, an old senior from the college. Anuj showed the chart of expenses on his phone and said that he manages the entire fintech with just one rule. This was 50 30 20 rule. This was the first time for Dev that he understood that finance could also be made as easy as a story.
50 percent are necessary expenses
The very next day, Dev started dividing his salary into three parts. The first part was 50 percent, which he kept for essential expenses. This included rent, food, electricity, mobile bill and expenses for commuting to office. As soon as he started tracking these expenses, he realized that many of the expenses were being incurred just out of habit and not out of necessity.
30 percent for lifestyle but with planning
The second part was 30 percent. This was the money which was spent on lifestyle. Earlier, Dev used to spend his money on eating out, movies and shopping at the beginning of the month. Now he started planning it in advance. He realized that it is not necessary to spend money every time to be happy. Gradually this part also started coming under control.
20% saving and investment brought real change
The third part was 20 percent, i.e. saving and investment. Initially he thought it would be difficult to withdraw this much but month by month this became the easiest part. With this he created his emergency fund. Then he started SIP and realized for the first time that his money was not only being saved but also growing.
Why is this rule important for everyone
Most of the people in India earn a good salary but do not keep track of their expenses. The result is the same confusion every month as to where the money has gone. The beauty of the 50 30 20 rule is that it makes you into the habit of planning, no matter what your income is.
Dev’s life had changed after six months
When Dev saw his bank statement after 6 months, he himself was surprised. Where earlier the account showed zero every month, now he had an emergency fund. A good amount had been added to his SIP and there was no impact on his lifestyle. Dev realized that the real difference comes not from increasing salary, but from learning planning. Even today Dev does the same job but no longer lives a life of empty pockets. He knows where every rupee of his salary is going and every month his bank balance is getting a little stronger. This is the real power of 50 30 20 rule.
