ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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50% of your income for necessities, 20% for long term savings and 30% to lifestyle choices
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50% of your income for wants, 20% for needs and 30% to lifestyle choices
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50% of your income for long term savings, 20% for needs and 30% to fun choices
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50% of your income for fun choices, 20% for long term savings and 30% to housing
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Detailed explanation-1: -This is a simple rule that helps in creating a savings mindset while ensuring that there is money for enjoying life too. 1. This is a thumb rule that can help in the budgeting aspect of personal finance. 2.50% of aftertax income should be used for needs, 30% for wants, and 20% for saving and investing.
Detailed explanation-2: -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.
Detailed explanation-3: -Because the 50-20-30 rule is a simple budgeting concept, it can be a good choice for people who are new to creating a personal budget. The percentages can be easy to calculate or plug into any spreadsheets you already use for your financial information.
Detailed explanation-4: -The rule is very simple in practice. It asks you to break your in-hand income into three parts. 50% of the income goes to needs, 30% for wants and 20% to savings and investing. In this way, you will have set buckets for everything and operate within the permissible amount for each bucket.
Detailed explanation-5: -For instance, if the monthly salary is ₹50, 000 per month, 50% of ₹50, 000, i.e. ₹25000, should be spent on expenditures, 30%, i.e. ₹15000 on desire and 20%, ie., ₹10000 should be spent on savings.