Get Car Insurance
Get Car Insurance
Get Car Insurance

You can now get your insurance policy and even pay in installments.  Click here & find the best insurance policy for you in minutes.


What is a 50-30-20 budgeting plan?

Publish Date: 04 Feb 2021


What is a 50-30-20 budgeting plan?

A new budgeting plan will help you with your salary

If you want to get a handle on your income and spending to either budget in general or save for a specific goal there are many ways to go about it. The easiest way to start is the 50-30-20 rule whereby you divide your income accordingly.


50% Major Obligations


The first 50% of your income is directed towards paying off major obligations such as:


  • Rent
  • Utilities
  • Major Installments (loans, credit cards, etc.)
  • Groceries


This allows you to prioritize your major expenditures and if you are off-budget then you can still meet them


That budget works whether you have a fixed or variable income (i.e. it changes monthly)


20% Savings


The second 20% should be directed towards a savings plan with which you can save for major future purposes like a TV, trip, car or even a downpayment on a house


30% Discretionary Spending


This is the amount that's leftover, hopefully, it's 30% but if it's less you should stick to the smaller %. This is what you spend on eating out, shopping, and all the other little luxuries in life that are not necessary. 


The main benefits of the 50-30-20 method are:


  • It works whether you have a fixed or variable income (i.e. it changes monthly)
  • It’s easy to use and adjust (50-30-20 are not set in stone but are a general guideline)
  • It will make you aware of your spending habits and where you can save


The most important thing in starting is having the will and determination. Even if you go off plan one month, that's ok, get right back on track the next one.

Editors' Choice

faydety logo text

Banking Products

Personal Loans

Car Loans

Home Loans

Micro Finance

Credit Cards

Saving Deposits