BANKING AFFAIRS

Detailed explanation-1: -The rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-do. The remaining half should be split up between 20% savings and debt repayment and 30% to everything else that you might want.

Detailed explanation-2: -Saving is the portion of income not spent on current expenditures. In other words, it is the money set aside for future use and not spent immediately. Why should we save money?

Detailed explanation-3: -Income – Savings = Expense This literally means, the moment we draw our salary, we first divert the funds towards savings and spend whatever is left after saving.

Detailed explanation-4: -One of the most common percentage-based budgets is the 50/30/20 rule. The idea is to divide your income into three categories, spending 50% on needs, 30% on wants, and 20% on savings. Learn more about the 50/30/20 budget rule and if it’s right for you.

Detailed explanation-5: -40% of your income goes towards your savings. 30% of your income goes towards necessary expenses (food, rent, bills, etc.). 20% of your income goes towards discretionary spending (entertainment, travel, etc.). 10% of your income goes towards contributory activities (donations, charity, tithe, etc.).