Just try the 70/10/10/10 formula, you will never get into trouble, everything will go well
70/10/10/10 Rule: There are many people who earn money, but they cannot manage their salaries properly. Due to this, they have to face problems. If you do not spend your earned money according to the plan, then the shortage will never leave you. So there are many financial rules for this, but today we will tell you about such a rule, which, if you put into your life, you will never face a shortage. Along with this, you will also become rich. This money management rule is 70/10/10/10. You must have thought, after seeing this, What is this calculation? So let’s understand it in a very simple way..
70/10/10/10 Rule: This formula will solve all your problems very easily. Actually, in this rule, your salary will be divided into 4 parts. 70% of your expenses. 10% for savings, 10% for investments, and 10% for paying loans. This system controls both current expenses and future security.
- 70%- Daily expenses
- 10%- Short-term savings
- 10%- For investments
- 10%- For pay loans
70%- Daily expenses:
– This part includes your essential expenses like rent, ration, electricity-water bills, insurance, and children’s expenses.
– Also for your entertainment, such as OTT subscriptions and phone recharges.
– If you are spending more than 70%, then spend as much as you need.
10%-Short-term savings or emergency fund:
-This controls your small and big expenses.
-Use it for emergency medical expenses, car repairs or during the festive season.
-Make it auto-transfer, which will make it easier for you.
10% Investment for the future:
-Invest through mutual funds, ETFs or SIPs.
-Invest in government schemes like PPF, NPS or ELSS.
-Invest in Sukanya Samriddhi Yojana or ULIP plan for children.
10% Debt management:
-Pay the largest loan first
-Pay the smallest loan last.
Why this rule is popular: This rule is very simple and does not require much thought. It involves regular savings, investment and control over spending. Worrying about money becomes less and your lifestyle becomes more under control.
